Research
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Quarterly Spotlight

Optimism grows, but many still see a long path ahead

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As more Americans receive a COVID-19 vaccination and states lift restrictions, small business owners are more optimistic that the worst of the pandemic is over, but many still see some time before things return fully to normal.

Crucially, more small businesses say they are open: the majority (72%) of small businesses say they are now fully reopened. 24% say they are partially open and only 3% say they are temporarily closed. The dominant emotion small businesses are reporting is “hopeful” (44%), followed by “comfortable.” More negative emotions are rarer with 24% “concerned” and 21% “nervous.” In contrast, 23% are “excited.”

Fully opened businesses are more likely to say they are “comfortable,” while partially opened businesses are more likely to list negative emotions, including “concerned,” “nervous,” “worried,” and “uncomfortable.”

A majority (65%) agree that the worst of COVID-19 is behind us, up a huge 21 points from Q4 2020. Strong majorities across sectors agree with this, but retailers are least likely to agree the worst is behind us.

Small businesses in the service sector experienced the greatest improvement in this worst-is-behind-us sentiment, jumping a staggering 38 points from Q4. They are followed by professional services which jumped 30 points since then. Retailers lagged in overall sentiment with 57% agreeing the worst is over.

How concerned are you about the impact of coronavirus or COVID-19 outbreak on…

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When it comes to COVID-19, I believe the worst is behind us (Agree, net)

A bar chart highlighting whether small businesses thought the worst of the COVID-19 pandemic was behind them, broken down by sector. Compares responses from Q4 2020 and Q2 2021.

Concerns about the coronavirus’s impact are also dropping swiftly. This quarter, 64% are concerned about the impact of the coronavirus on their business, down 12 points from last quarter.

Notably, just 24% say they are very concerned, a quarter-on-quarter decline of 18 points. Concerns varies by part of the country, business size, and by sector—but all are showing consistent declines. Key drivers of the overall 12-point drop in concern are small businesses in the Midwest (down 16 points) and West (down 16 points), and those in retail (down 22 points).

Still, a majority of small businesses see months before the business climate returns to normal. 54% of small businesses think it will take between six months and a year to return to normal. Overall, around one in three small businesses (31%) think the environment will be back to normal in six months or less, up six points from last quarter.

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Most would like customers to carry proof of vaccination, employees to get vaccinated

America’s small businesses support proof of COVID-19 vaccination for customers, and most would likely support requiring employees get vaccinated.

Nearly two-thirds (64%) support requiring customers to show proof of vaccination for entry or service in shops, restaurants, offices, and other businesses in their area. Support is strongest among small businesses in the Northeast (76%) , but lowest in the Midwest (55%), although in all regions a majority support customers showing proof of vaccination. Also, 78% of minority owners agree customers should have to provide proof of vaccination to enter a business, compared to 59% of non-minority owners. Support for proof of vaccination for customers also varies based on generation. Millennial-owned small businesses are most likely to support it (74%), though majorities of Gen X-owned businesses (66%) and baby boomer or older generations (55%) support it in smaller numbers.

Also, a majority (59%) likely support requiring their employees get the COVID-19 vaccine once it’s available. Northeastern small businesses are most likely to support requiring their employees get vaccinated (67%), while Midwestern small businesses are least likely (49%) to do so. Likewise, 71% of minority-owned small businesses are likely to support requiring their employees get vaccinated, compared to 56% of non-minority owners who say the same. There is an interesting generational divide here: Gen X business owners are most likely to support requiring employee vaccinations at 66%, followed by Millennials (56%) and Baby Boomers (54%).

Overall, a majority of small business owners report either already being vaccinated or very likely to get the vaccine as soon as it is available. 27% say they have had at least one shot of the vaccine and 47% say they are likely to get the shot once it’s available to them. Minority small business owners are more likely to quickly get a COVID vaccine. 59% of minority small business owners are likely to get the COVID vaccine as soon as it is available to them, compared to 43% of non-minority owners.

65%
of small businesses agree that the worst of COVID-19 is behind us, up 21 points from Q4 2020.
64%
of small businesses support requiring customers to show proof of vaccination for entry or service.
65%
of small businesses agree that the worst of COVID-19 is behind us, up 21 points from Q4 2020.
64%
of small businesses support requiring customers to show proof of vaccination for entry or service.
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Most Believe Less Restrictions, More Vaccines Are Key to Success

Small businesses say they know what will lead to success in 2021: less government pandemic restrictions and greater rollout and uptake of COVID vaccinations. Most also report having made—or continuing to make—adaptations to how they conduct business in order to cope with the pandemic.

All businesses, regardless of operating status, are eager to get back to normal. Around eight in ten report they either opened their business fully as soon as their state allowed it (if already open), or plan to do so as soon as it is allowed (if partially open or temporarily closed).

Small businesses say that easing COVID-19 restrictions (29%) and ramping up vaccinations in their area (28%) are the two biggest keys to their success in 2021. 24% say help in growing their business’s digital presence and 19% say federal small business relief funds are critical to success this year.

Around eight in ten small businesses have made, or plan to make, adaptations at their business in response to post-pandemic reopenings. The most common are expanding in-person services and offerings (24%), increasing hours of operation (24%), and returning to full capacity in the workplace for employees and customers (23%).1 However, few plan to relax restrictions for customers (19%) or employees (17%) in the next six months.

However, small businesses are not in any rush to ditch new COVID safety protocols. 76% of small businesses intend to keep all COVID-19 safety precautions in place until the coronavirus pandemic ends.

28%
of small businesses say that ramping up vaccinations is critical to their success in 2021
76%
of small businesses intend to keep all COVID-19 safety precautions until the pandemic ends.
28%
of small businesses say that ramping up vaccinations is critical to their success in 2021
76%
of small businesses intend to keep all COVID-19 safety precautions until the pandemic ends.
“The Charlottesville economy is quickly recovering, with restaurants beginning to open. It seems the biggest issue for local businesses is bringing back a strong workforce as they re-open their doors, but that is based on anecdotal data of seeing countless help wanted signs.”
Kevin Hubbard, Co-Founder, Rhoback, Charlottesville, Virginia
1. Question asked only of those whose business is not permanently closed (N=750).