Small Business confidence has rebounded in the third quarter, a small sign of progress after widespread, coronavirus-induced business closures and general disruptions, according to the recently released CNBC/SurveyMonkey Small Business Confidence Index.
Notably, the number of small business owners who describe current conditions as “good” doubled from 18% in Q2 to 36%, the second-lowest number ever for the survey and 20 points below the Q1 survey in February. Meanwhile, SurveyMonkey reported 23% say current business conditions are “bad” — down from last quarter but still more than three times the number (7%) who said times were bad at the start of the year.
In a positive sign, more than 6-in-10 small business owners (64%) say they can continue operating under current conditions for more than a year. The figure is exactly double the number of respondents who felt that way three months ago (32%).
Employment is on the rise. Nearly a quarter of small business owners (24%) who had to layoff or furlough employees because of the shutdowns in March/April, say they’ve hired all of their employees back. More than one-third (34%) say they have hired some employees back. These figures are reflected in the positive Jobs Report from the Labor Department on August 7. Only 15% say they have not brought anyone back and do not expect to.
In July, the unemployment rate declined by 0.9 percentage point to 10.2 percent, and the number of unemployed persons fell by 1.4 million to 16.3 million. Despite declines over the past 3 months, these measures are up by 6.7 percentage points and 10.6 million, respectively, since February, the Labor Department reported.
Meanwhile, the number of unemployed persons who were on temporary layoff decreased by 1.3 million in July to 9.2 million, about half its April level. In July, the number of permanent job losers and the number of unemployed re-entrants to the labor force were virtually unchanged over the month, at 2.9 million and 2.4 million, respectively, according to the Jobs Report.
More than half (54%) of small business owners say their company has had unforeseen costs associated with new coronavirus-related safety measures. For instance, McDonald’s requires its franchisees to clean bathrooms every half-hour and digital kiosks after every order, according to a report in the Wall Street Journal. Likewise, small business owners now must spend more on cleaning supplies, hand sanitizer and personal protection equipment. Only 9% of small business owners say they are passing those costs on to customers via higher prices or fees. Thus, their margins are even slimmer.
Despite these challenges, 46% of respondents to the CNBC/SurveyMonkey poll expect their business’s revenue to increase during the next 12 months. One-third expect revenues to stay roughly the same, while 20% fear decreases.
“These latest results offer a glimmer of optimism from the small business world,” says Jon Cohen, chief research officer at SurveyMonkey. “Even as seven in 10 small business owners say the pandemic has caused permanent changes in the way they operate, nearly as many of those who made it through the first throes of the crisis express confidence they can survive for a year or more.”
Some companies have been able to create opportunities during the pandemic. For instance, InstaShield co-founded by serial inventor Dan Brown and his son, Dan Jr., quickly filled the void of protective face shields. When they saw news reports of people making face shields on 3-D printers, they found a way to mass-produce shields in the U.S. and get them to essential workers and consumers expediently.
Kaas Tailored ramped up production of making surgical masks and face shields for health care workers on the front lines of the coronavirus pandemic.
Terraboost Media, an advertising agency that places billboards on hand-sanitizing kiosks placed in stores, malls, and transportation hubs nationwide, reported growth of 600% since February. Among its biggest clients are pharmacy chains CVS and Rite-Aid and supermarket chains Albertsons and Stop & Shop.
“We have grown our workforce by 40%,” Brian Morrison, president of Terraboost, told CNBC.
Morrison says that nearly 50 colleges and universities preparing to reopen their campuses have ordered kiosks and Tazza brand hand-sanitizing products from his company as September approaches.
Among bigger firms, Amazon and Zoom, the online video conferencing platform, boomed during the pandemic.