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Uncertainty And Tenacity Grow Among Small Business Owners As They Close Out A Troubled 2020

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Uncertainty And Tenacity Grow Among Small Business Owners As They Close Out A Troubled 2020

The final weeks of 2020 are upon us, though the end of the troubled year may be of little consolation to the nation’s small business owners, many of whom are facing dire circumstances during what is typically their most profitable season.

As a result of indeterminate lockdown measures and prolonged limitations on the number of employees and patrons businesses are allowed to hold, the outlook among many business owners is grim. A recent survey conducted by CNBC following the results of the 2020 election showed optimism at an all-time low since they first started conducting the survey in 2017.

Indeed, other signals from business organizations like the U.S, Chamber of Commerce and the National Federation of Independent Business have also revealed the deep struggles afflicting the small business community.

However, among these reports are also signs of resilience, tenacity and forward-thinking preparation from the nation’s entrepreneurs. It’s something Credibly has also seen evidence of in recent weeks, business owners planning for their future, worrying about what it may hold and how they can best prepare for fresh start into the new year

Businesses Defy Expectations

Case in point, a recent survey conducted by Bank of America Corporation (NYSE: BAC) revealed that, although under duress, a large swath of the nation’s small businesses have remained open. According to the bank’s head of small business, the figure stands at around 85%, which is roughly in line with typical rates of retention through a given year.

This rate of retention can largely be chalked up to the success of the government’s Paycheck Protection Program, which a third of the survey’s respondents reported successfully applying for.

Of course, with the PPP loans largely expended at this point, many of the survey’s respondents have understandably curtailed hiring and other outlays as businesses attempt to retain as much of their workforce they can.

Still, recent jobs data from ADP shows the slowdown was not as dramatic as originally suspected,  and many of the most significantly affected businesses in the food and hospitality industry actually led hiring through the month.

Owners Split On What Lies Ahead

Nevertheless, the Bank of America survey also revealed business owners are cautious about the pace of hiring and growth going forward. Just 12% of the business owners surveyed anticipate hiring in the next 12 months while 59% believe the pandemic will continue to impact their bottom line well into 2022.

Perhaps most illuminating is the fact that the revenue outlook among those who participated in the survey was split evenly three ways, with about one-third anticipating higher revenue through 2021, one-third expecting lower revenue, and one-third expecting sales to remain flat.

While it is impossible to predict whether this diversity of outcomes portends wealth or woe for the nation’s small businesses, one aspect that the survey’s sponsors predict will play a defining role over the next 12 months is access to capital.

In the near term, that means additional support from the Federal government and the extension of successful programs like PPP, which groups like the U.S. Chamber of Commerce, NFIB and many other business advocacy groups continue to petition for.

And the hope for such relief is growing as Washington works toward a new relief bill before the new year. But regardless of what the next few weeks and months may bring, small business owners should continue to look ahead to the future and set a plan for their place in it.

 

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