Main Street Morale
Written By NaviPay Blog Contributor:
Coastal Business Evolution, LLC
Small business is synonymous with Main Street. But whether your small business is on Main Street or somewhere else, you have taken quite a ride with the Coronavirus. In spite of this, small business confidence is up. In Q3, 64% of small businesses are confident that they can survive more than a year under current conditions, almost double the 34% when businesses were asked in April.
What’s fueling the small business near optimism? The first stimulus package and additional federal unemployment benefits may be part of the answer for the Q3 confidence. In addition, many small businesses adapted safety measures for staff and patrons. Spending money on coronavirus has become the norm for more than half of all small businesses, even though only 9% of those businesses passed the costs on to their customers. The sentiment is that while the virus is not completely under control, we’ve gained knowledge on what precautions we need to take, so businesses take them. Such safeguards may be here to stay with nearly 70% of small businesses stating that new virus related safety measures will have a permanent impact on how they conduct businesses.
Will this small business optimistic outlook continue? It would be great, but probably not likely. There are several factors that may have an impact on consumer spending in the last four months of this year. With the delay in coming to an agreement on a second stimulus package, a second stimulus check isn’t immediately on the horizon, if it is going to happen at all. The federal unemployment boost has expired. Many people simply will not have the money to spend. This recession that started in February has impacted not just low wage workers, but also white color workers in unprecedented numbers. As we have moved towards a more normal business climate, lower-wage jobs have rebounded first. White-collar jobs earning over $50,000 annually are not returning quickly and some will not at all. Long-term white-collar unemployment will have a profound impact going forward because they will not be spending in blue-collar service businesses such as salons, gyms, and restaurants.
We all must face the fact that recovery from the recession may be coming slowly with a majority of economists saying not to expect it until late 2020 or early 2021. One-fourth of economists says to prepare for a double dip recession.
This means that the main street won’t be moving forward in a straight line to recovery. Small businesses must have a strategy to hang on for a longer haul than we had hoped. Learning and taking advice from other businesses can help as well. As consumers, we must continue to support out local small businesses and to shop small and shop local as much as possible.