The Bank of America 2020 Small Business Owner Report found that small business owners have shown resilience (more than 4 in 5 remained open) and displayed confidence (nearly 4 in 5 feel they will be the backbone of the post-pandemic economy).
And, while most said the effects of the pandemic will impact their bottom line for two years or less, small business owners also said they felt they would have a greater ability to handle future pandemic-type outbreaks — and that the pandemic has increased an appreciation for small businesses.
The annual survey of 1,000 entrepreneurs nationwide explored how business owners are navigating an evolving small business landscape brought on by coronavirus — including their business outlook, economic concerns and perspectives on a path forward.
Some of the high-level findings include:
- Business owners remain resilient and flexible: More than 4 in 5 remained open in some capacity amid the shutdowns. Of those, more than three-quarters said their day-to-day operations have been impacted. Many have also found new and innovative ways to supplement their business;
- Access to capital remains crucial: More than 2 in 5 business owners applied for at least one type of loan to address the impact of coronavirus. For many, this capital gave them the ability to keep employees on staff and maintain operating expenses;
- There is a guarded business and economic outlook: Entrepreneurs are significantly less confident in the economy over the next 12 months — with optimism declining to levels not seen since 2016. While business owners are also reporting softer business projections for the coming year (with revenue expectations and hiring plans at record lows), the majority expect to keep staffing levels stable in 2021;
- Hiring freeze: 7 in 10 small business owners plan to keep staffing levels stable in 2021; 13% plan to hire in the year ahead.
Sharon Miller, head of small business at Bank of America, said she is impressed and inspired by the results.
“During what have been unprecedented challenges for small businesses this year, I’ve been inspired by business owners throughout the country who have demonstrated a commitment to innovation while serving the needs of their local communities,” she said. “Every day, I hear from entrepreneurs who are retooling and adapting to create new opportunities for themselves and their employees.”
The survey showed nearly one-quarter of entrepreneurs took steps to reinvent themselves or help their local communities. Of those business owners, 61% developed new products or services and 51% donated time, products and/or services to support relief efforts.
Business owners cite the political environment, the impact of coronavirus, health care costs and consumer spending as their top concerns for the year ahead. But the entrepreneurs also said they anticipate a strong post-pandemic environment will support small businesses.
On the road to recovery, they say stronger consumer confidence and increased spending (79%), restored confidence in public health (78%), debt forgiveness (66%) and government relief programs (66%) will be most beneficial. Once the U.S. recovers from the pandemic, many entrepreneurs believe:
- Small businesses will return to being “the backbone of the U.S. economy” (79%);
- Consumers will have a greater appreciation for small businesses (69%);
- Entrepreneurs will be better prepared to handle potential reemergence of the coronavirus (59%);
- The effects of coronavirus will impact their bottom line for two years or less (59%).
For all the optimism, the survey also showed there is a guarded business and economic outlook. Entrepreneurs are significantly less confident in the economy over the next 12 months — with optimism declining to levels not seen since 2016:
- 39% of business owners anticipate their local economy will improve over the next 12 months (down from 51% pre-pandemic 2020 and the lowest since 37% in fall 2016);
- 37% predict the national economy will improve (down from 47% pre-pandemic 2020 and the lowest since 29% in spring 2016).
Business owners are also reporting softer business projections for the coming year, with hiring plans and revenue expectations at record lows since 2012 and 2013, respectively.
- 7 in 10 plan to keep staffing levels stable in 2021; 13% plan to hire in the year ahead;
- Earlier this year (pre-pandemic 2020), 55% of business owners expected their revenue to rise over the next 12 months. This fall, there is an even split among those who expect revenue to increase (34%), stay the same (34%) or decrease (32%).
For an in-depth look at the insights of the nation’s small business owners, read the full Bank of America 2020 Small Business Owner Report.