As we roll into a new year, optimism and pessimism seem to be running neck and neck depending upon who you talk to. Small businesses in the country seem to be no exception. There is just so much smoke being released that it can be difficult to see where things actually are and where they are going. MetLife and the US Chamber of Commerce have taken a fourth quarter pulse and has released some interesting data. Below is taken directly from their published research:
- Most small businesses say the worst of the pandemic’s economic impact lies ahead. More than three in five (62%) small business owners believe the worst of the COVID-19 pandemic is ahead of us. Just 44% say the worst is behind us.
- More this month plan to reduce staff (14%, up from 9% last quarter), reaching levels not seen since the beginning of the pandemic in late April (13%). However, a majority of small businesses (52%) still anticipate retaining the same size staff. Before the pandemic began, 64% reported plans to retain, 30% to increase, and 5% to reduce staff.
- (48%) report lower revenue this year when compared to the same time last year. Furthermore, half (50%) of small businesses see their operations continuing for a year or less before having to permanently shut down. Nonetheless, 40% (28% in late March) of small business owners believe their business can continue to operate indefinitely without having to shut down permanently.
- Two-thirds (67%) also say they have a business plan to adapt to a changing economy and a clear idea of how to change their business if they start to struggle. Some anticipate better times ahead: a majority (52%) anticipate revenue increases one year from now.
- 29% of small businesses describe the U.S. economy as good (up seven points from September). In Q4 2019, 57% said the national economy was good. 50% characterize the economy as poor (down from 58% in September).
- 74% of small businesses say additional federal government relief funds would be important to their business’ ability to succeed in 2021.
- Since the end of May, manufacturers and services firms have become more optimistic about future revenues (up 11 and 16 points), while retailers have become more pessimistic (down 12 points).
- A majority (56%) of small business owners continue to believe it will take six months to a year for the small business climate to return to normal.
- Northeastern small businesses report drastically lower numbers in overall business health (38%) and comfort with cash flow (48%). These scores are at least 12 points lower than other regions.
-Written by Kevin Sawyer
