Despite Continued Difficulties, Small Business Owner Optimism Continues to Grow in Latest Wells Fargo Survey
09 September 2020 - 10:00PM
Business Wire
Q3 study highlights improved future outlook tempered by
significant near term headwinds
Small business owners have faced unprecedented challenges due to
the pandemic and are in the midst of great uncertainty with the
upcoming presidential election. However, the Q3 Wells Fargo/Gallup
Small Business Index indicates there is a continued spirit of
forward-facing optimism among small business owners despite the
persistent trials. The overall score rose 12 points from last
quarter’s historic low-water mark, driven by a sharp rise in
sentiment about future expectations. The overall positive movement
in sentiment was contrasted by the third successive quarterly
decline in optimism about current business conditions.
A brighter future seen amid challenging current
environment
The Q3 pulse check of business owners, fielded in early August,
shows a clear dichotomy between the immediate challenges small
businesses face and their views on the future. While only 19% of
business owners feel optimistic about their present situation (a
20% decline from Q2), 41% feel optimism about what the future may
hold, marking a 32% quarter-over-quarter rise.
Further illustrating this split in sentiment between current and
future state, when asked about revenues, 48% of small business
owners expected increases in the coming 12 months versus just 29%
who reported actual increases in revenues over the last year.
Furthermore, seven percent fewer owners (55%) say they felt
somewhat or very good about their cash flow in the last 12 months,
while 16% more owners said the same about their cash flow in the
coming 12 months.
“Small businesses have been navigating through incredibly
stressful circumstances for the last several months,” said Steve
Troutner, head of Small Business at Wells Fargo. “This latest
survey data indicates that many have worked hard to make
adjustments and are feeling better about their future prospects,
yet they still face tough near-term struggles as the economy
recovers at an uneven pace. During these tough times, we remain
committed to doing everything we can to help small business owners
adapt and succeed.”
2020 election and economic recovery are top-of-mind for
business owners
The Q3 survey also delved into how business owners perceive the
upcoming presidential election and found a high level of interest
and engagement, with 97% saying they were planning to vote in
November, and nearly 60% saying the outcome would have a major
impact on their business. When asked what issues they would like to
see the candidates focus on, three ranked highest: relief for small
businesses, taxes and getting the economy back on track. The
handling of the economic fallout from COVID-19 was also noted as a
critical expectation for the eventual winner, with 88% of small
business owners calling the next president’s approach to this
extremely or very important.
“It goes without saying that there are multiple major factors
impacting how businesses owners feel right now, from navigating a
pandemic to a hotly contested presidential election to an economy
that remains significantly hampered, and it’s all happening in the
same year,” said Mark Vitner, Senior Economist with Wells Fargo.
“With the impacts still being felt in a wide swath of industries
and sectors, the continued climb in owner optimism is an indication
of continued hope that time will move them toward a better
landscape for their businesses.”
Other top challenges
While the loss of business or closings due to impact of COVID-19
maintained its place as the top challenge for owners, this
indicator dropped by 17 points to 27% quarter over quarter.
Simultaneously, challenges in attracting new business rose five
points to 15%, while concerns around financial stability and cash
flow rose by four points to 11%. Meanwhile, though owners had
called out taxes as a key issue in the upcoming election, only two
percent said it was the top challenge in Q3.
Wells Fargo/Gallup Small Business Index Scores: Q1 2019 – Q1
2020
Overall Index Score
Present Situation
Future Expectations
Q3 2020 (surveyed August 2020)
60
19
41
Q2 2020 (surveyed April 2020)
48
39
9
Q1 2020 (surveyed January 2020)
132
63
69
Q4 2019 (surveyed September
2019)
142
67
75
Q3 2019 (surveyed July 2019)
136
64
72
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a diversified,
community-based financial services company with $1.97 trillion in
assets. Wells Fargo’s vision is to satisfy our customers’ financial
needs and help them succeed financially. Founded in 1852 and
headquartered in San Francisco, Wells Fargo provides banking,
investment and mortgage products and services, as well as consumer
and commercial finance, through 7,300 locations, more than 13,000
ATMs, the internet (wellsfargo.com) and mobile banking, and has
offices in 31 countries and territories to support customers who
conduct business in the global economy. With approximately 266,000
team members, Wells Fargo serves one in three households in the
United States. Wells Fargo & Company was ranked No. 30 on
Fortune’s 2020 rankings of America’s largest corporations. News,
insights and perspectives from Wells Fargo are also available at
Wells Fargo Stories.
Additional information may be found at www.wellsfargo.com |
Twitter: @WellsFargo
Methodology
Results for Wells Fargo/Gallup Small Business survey are based
on web interviews with 600 small business owners, conducted during
the period August 7-14, 2020. Beginning in Q2, 2019, interviewing
formally transitioned from outbound phone data collection to a
national small business web opt-in panel provider.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200909005332/en/
Media Manuel Venegas, 213.269.2723
Manuel.venegas2@wellsfargo.com
Wells Fargo (NYSE:WFC)
Historical Stock Chart
From Apr 2024 to May 2024
Wells Fargo (NYSE:WFC)
Historical Stock Chart
From May 2023 to May 2024