The Covid-19 pandemic has taken its toll on the physical well-being of those of us who live in Atlanta. According to an Edward Jones survey of Atlanta small business owners, conducted by Morning Consult in November 2020, many of Atlanta’s small businesses say they are worse off compared to a year ago and a large number are worried about the survival of their companies.
Despite the circumstances, the same survey revealed signs of optimism and resilience. Business owners understand the importance of investing in innovation. Even under the difficult conditions of the past year, 13% of companies boosted their spending on innovation or technology. Over the next year, 41% plan on investing in innovation. The pandemic has dramatically accelerated the digitization of the economy, and businesspeople recognize they will need to do the same to remain competitive.
In addition, 80% of the businesspeople we polled said they were confident about local business conditions, and many expressed a willingness to invest in their companies once signs emerge that the economy is getting better. That underlying optimism suggests many small businesses can pull through this crisis as they have in the past.
Our survey asked small business owners a range of questions about their current situation and about the future. We found that a significant number, 40%, say their finances are in worse shape than they were a year ago. Interestingly, 29% say they are doing better, another indication of how this crisis is affecting everyone differently.
Business owners are setting priorities. Specifically, they are pulling back on insurance plans and rent, even as they are building up liquidity and emergency funds. As financial advisors, we see our small business owner clients wrestling with these decisions every day. Our job is to help them navigate the current crisis while making sure they are laying the groundwork for the future.
Atlanta business owners are closely following national and local economic issues. On the macro level, they are most concerned about the health of the U.S. economy and the direction of the country. Closer to home they are worried about survival. More than half of those polled, 56%, said they had concerns about whether their own company might be forced to close. They also expressed concern about the fate of other local business, but they remain confident about local business conditions. The fact that 80% of our respondents said they were confident about Atlanta’s local business conditions was certainly an encouraging piece of news. That number was higher in Atlanta than it was in other cities we surveyed.
Companies are ready to invest once they see signs of improvement. When asked what would make them more confident about investing in their companies, business owners listed increased revenue, increased consumer demand and an improvement in the national economy.
In some respects, the financial decline triggered by the pandemic is unique. It was caused by a health crisis, not any fundamental problem with the economy, and it happened almost overnight as the lockdowns hit in March. While we aren’t yet post-pandemic, we have already seen signs of economic rebound and expect this to continue throughout the year.
We are heartened by the way businesses and consumers were able to use technology to keep working during the pandemic. We are further encouraged by the swift development of the vaccines, a tribute to American ingenuity and cooperation.
We see the same reason for optimism here in Atlanta. Economic conditions are expected to gradually improve as we move through 2021. It won’t happen overnight, but the economy can recover and with it, so will the confidence of small business owners, who remain a critical piece of the economy and a key source of job growth.
