- Small business survey finds reduced confidence among small business owners as COVID-19 conditions continue
- Businesses often struggle with cycles of opening and closing as waves of the virus prompt new business restrictions
- Majority of respondents express support for Biden’s economic stimulus proposal, but are wary of other potential changes the administration may make
Interruptions and reversals are challenging small businesses as they try to reopen, leading to more pessimistic outlooks among their owners and greater support for a new round of economic stimulus.
A CNBC and SurveyMonkey poll of 2,111 small business owners in January found that the overall confidence score among respondents stood at 43, the lowest since the poll began in 2017. While 54 percent say they have been able to remain open throughout the pandemic, one in five said they had to close and reopen at limited capacity while one in 10 had closed and not yet reopened.
Just 29 percent said current conditions were good for their business, down from 39 percent in the previous quarter and 56 percent in the first quarter of 2020. One in four respondents said conditions were bad for their business. Respondents were also less likely to expect that they will increase their revenues or hire new staff in the coming year.
Companies have often been forced to adjust how they do business during the pandemic, as the strict lockdowns or restrictions imposed at the start of the COVID-19 pandemic have been subject to frequent changes as infections spike and ebb. Businesses that need to open and close repeatedly have found it difficult to retain customers, and often incur hefty expenses in preparing the business for reopening after it has been shut down.
In Connecticut, most businesses have been allowed to open with capacity limits and other safeguards since the state moved to Phase 2 of its reopening plan over the summer. It briefly advanced to Phase 3, but rising COVID-19 cases forced a return to a modified version of Phase 2 soon after. Businesses have been operating under these rules since November.
The CNBC/SurveyMonkey poll found that 55 percent of small business owners expect that they can remain operational for another year, down from 67 percent in the fourth quarter of 2020. Black respondents were especially concerned about their chances of survival, with just 37 percent saying they were confident they can survive another year.
Although respondents were more likely to identify themselves as Republicans than as Democrats, there was broad support for President Joe Biden’s $1.9 trillion economic stimulus proposal. Sixty-three percent of respondents said they supported the measure, including 96 percent of Democrats, 60 percent of independents, and 46 percent of Republicans.
However, respondents were more pessimistic about the administration on other fronts, with a majority anticipating business regulations and tax policy that will have a harmful effect on their business in the next 12 years. Forty-two percent said they think the Biden administration will result in more harmful trade policies, although the same share said they don’t expect there to be any major change on this issue. Respondents were less likely to think that technological innovation or immigration policy would seriously impact their business.
A net share of 54 percent opposed Biden’s proposal to increase the federal minimum wage to $15 an hour, with a net share of 44 percent supporting the idea. However, nearly half – 48 percent – said the minimum wage increase would have no effect on their business. Twenty percent said they would lay off workers, 16 percent said they would raise salaries, and 13 percent said they would do both.
