A new survey by Capital One Business reveals small business owners are cautiously optimistic. And many are looking for a return to more favorable business conditions come 2021.
According to the survey conducted from November to December 2020, about 53% of small business owners report their business financial position is the same or better than the pre-COVID-19 period. A further 67% of the owners are confident their business will return to pre-pandemic operations and revenues. So, there is growing optimism over the state of the economy and possible resilience among small businesses.
Capital One Survey Shows Small Business Optimism
This is despite a slight decrease compared to three months ago. Then, 57% of business owners reported their financial position was the same as or better than pre-pandemic.
Other findings of the study:
- 85% of business owners are confident they will still be operating six months from now.
- 75% of business owners kept the same or increases their number of employees since the onset of the pandemic.
- Looking ahead 60% of owners are confident the outlook for the US economy will be favorable to businesses in 2021.
- 69% of the respondents say providing customers with a safe shopping experience is a top priority for their business.
- 78% say because their marketing budget is small they are relying on word-of-mouth for their business to attract customers.
Not Out of the Woods Yet
Despite the continued levels of confidence and optimism among small business owners a rise in COVID-19 infections and negative impacts to supply chains have businesses concerned for their success over the next six months.
Almost three in four or 73% of businesses say they are concerned an increase in COVID-19 infections will impact the overall success of their business in the coming six months. This also includes the supply chain/vendors for 65% of owners, who say (71%) it will affect their performance during the fourth quarter.
Dipping sales is also a matter of concern for small businesses during this holiday season. Some 42% of businesses have reported their sales have decreased over the last three months. The period from October-December accounts for at least 25% of annual sales for 49% of businesses. Around 41% of businesses expect their sales in the fourth quarter to decrease compared to the same time last year.
To mitigate this 89% of businesses are planning to cut costs and purchase PPE to help their business navigate the pandemic in the next six months. Only a fraction (11%) report closing temporarily or plan to temporarily close as a result of the pandemic in the next six months.