Survey Finds Small Business Owners Less Confident in the Economic Conditions Ahead
As 2020 finally nears an end, small business owners and many others are already looking to the future. Unfortunately, while there are reasons to be hopeful, the immediate future may not seem all that different from our current reality. In fact, a recent survey from Bank of America found that entrepreneurs continue to worry about the long-term impacts that the pandemic will have on their businesses.
First, according to Bank of America’s survey (which was conducted between July 29th and September 3rd of this year), 38% of small businesses stayed open throughout the pandemic as essential businesses and 37% stayed open by adjusting their operations to meet social distancing guidelines. Additionally, at the time of the survey, 7% of businesses had recently reopened after extended closures, while 8% remaining closed but had plans to reopen. However, 10% of respondents reported shifting operations to a remote model.
Of those businesses that are now open, 78% say that their operations have been impacted. For example, 45% say they’ve implemented enhanced sanitation practices, 37% have changed they primary revenue stream, and 33% have had to limit their hours of operation. Other notable impacts included supply chain disruptions (28%) and shifting to an online or digital strategy (25%).
Looking ahead, only 39% of small business owners surveyed expect that their local economy will improve in the next 12 months, with even fewer expecting an improvement to the national economy during that timeframe. These responses mark the lowest levels of confidence since 2016. As a result, a mere 13% of respondents plan to hire in the next year and only 34% expect their revenues to increase in the coming months.
Although that outlook may seem grim, few small business owners are anticipating the worst of outcomes. Asked how long they expected the economic effects of the coronavirus to impact their bottom line, the majority (59%) predicted it would be two years at most. That’s far above the 19% who expected effects to last three to five years and the 7% who anticipated them to last more than five years. Meanwhile, 15% stated that they have not been impacted nor plan to be.
Given everything going on, it’s should also come as no surprise that a number of concerns have grown more prominent for small business owners. Topping the list, 78% of those surveyed say they worry about the current political environment — up 15 percentage points since the last B of A survey. Notably, that even topped coronavirus impacts, which three-quarters of respondents worried about. Other top concerns included health care costs (62%), consumer spending (56%), the stock market (50%), and the strength of the U.S. dollar (49%).
On the bright side, significant developments related to a COVID-19 vaccine have continued. Additionally, although nothing is guaranteed, a recent streak of bipartisanship has helped move the prospects of another relief and stimulus bill forward. While it’s too early to say whether these events will help accelerate the recovery time for most small businesses, hopefully we’ll start to see things turn around sooner rather than later.