As business slowly comes back in the wake of easing government coronavirus restrictions, small and medium businesses are feeling better about the economy. While nearly half of businesses still feel the climate is poor, that’s a sizable improvement from March, when 73% felt that way.
This is according to a new “Business Barometer & COVID-19 Impact” report from Borrell, based on the firm’s small and medium business panel. The most recent monthly survey was fielded in August.
The new data shows the outlook for the future among small and medium businesses (SMBs) is normalizing. In March, only 12% felt economic conditions wouldn’t change in the next six months. In August, the number shot up to 46%. Twice as many respondents expressed optimism that things would improve in the latest survey, compared with four-year averages.
In another key finding, the COVID-19 impact on SMBs has settled. At the height of the government-mandated lockdowns in March and April, 56% said their businesses felt large negative impacts. In August, just over one-third (34%) said they were feeling large negative impacts.
The latest data also reveals a threefold increase in those who say the pandemic has helped their business. Sixteen percent now feel that way, with six percent claiming a large positive impact.
“A remarkable amount now tell us they've benefited from COVID-19's impact, and many are hitting re-start on ad budgets,” CEO Gordon Borrell told Inside Radio.
Heading into the fall, businesses are feeling better about their prospects and that has many of them restarting their ad budgets. In March, 52% said they planned to cut ad budgets in the coming months and 28% said they planned to maintain the same spending levels. Now, 52% plan to maintain and 27% plan to cut.
Costs and new ways to advertise were top-of-mind among respondent to the latest survey. “SMBs are working with tighter and more inconsistent budgets,” the report says. “They’re also trying to figure out new methods of advertising.”
Verbatim comments from the August 2020 survey reinforce this out-with-the-old, in-with-the-new sentiment. “We have to move swiftly to stay current. Nothing that worked before is the same so old buys that were laid in for the year are [not] as relevant in today’s market,” said one business owner. Another said, “We have a tight budget and anticipate budget cuts. We need results from the advertising/marketing that generates sales.”
Finally, the new survey shows business owners are being realistic. “Half say the business environment for small businesses still sucks, and whereas they once predicted the impact would end this autumn, they're now thinking it won't be until next June,” Borrell says. For example, in March, the average predicted recovery date was November 2020. In April they thought it would occur in December 2020. Now they’re not expecting it to happen until June 2021.