The National Federation of Independent Business (NFIB) released its monthly Small Business Economic Trends report, showing a rise in the number of business owners who feel uncertain about the future.
The Optimism Index showed a 6-point increase in the NFIB Uncertainty Index to 98, the highest uncertainty ranking since November 2016.
“Time will only tell if small business owners believe that a Biden administration is going to provide promise, hope, and certainty on Main Street,” John Kabateck, California state director for NFIB, said.
The Associated Press has called Democrat Joe Biden president-elect after he won 306 electoral votes compared to Trump’s 232, though legal challenges to election results remain pending.
Among the issues of concern for small business owners is whether Biden would broadly expand the reach of healthcare mandates and costs.
“Will there be an onslaught of more regulations and rules that are tilted towards organized labor, which helped get Biden elected to office? Only time will tell,” Kabateck told the Southern California Record. “Will there be an increase in taxes and more far-reaching employee leave programs at a time when small businesses don't have the funds to cover those costs? Only time will tell.”
Just this week, Gov. Gavin Newsom announced new COVID-19 restrictions that placed 28 counties in the purple zone effective Nov. 17, according to a statement online.
Purple tier restrictions include limiting indoor retailers and malls to 25% capacity while closing food courts, for instance.
“It will be grim,” Kabateck said in an interview. “Telling a small business owner that they have to cut from 50% to 25% capacity is going to hit their pocketbooks and ultimately will likely impact their ability to hire, build patios and all of those things.”
The three areas of the report in particular that resonated among California business owners include:
Earnings are up 32 points since June, improving to pre-crisis levels
“As long as the trends are at least continuing to creep upward, it shows that, even in California, small business owners aren't giving up and the consumer community is remaining faithful to their corner stores,” Kabateck. “I also feel that many families have been cooped up for so long that they are enjoying getting out and doing what they can.”
55% of owners reported hiring or trying to hire last month.
“The one thing we have heard repeatedly from our members in California is they're making every adjustment possible so as not to lay people off,” Kabateck said. “Many of them are in maintenance mode, which means putting the car in neutral and not expanding a lot on new employees.”
Of business owners making expenditures, 36% reported spending on new equipment, 16% improved or expanded facilities, 5% acquired new buildings or land for expansion and 12% spent money on new fixtures and furniture.
“Very modest declines and, in some cases, slight increases indicate that business owners are doing all they can to be creative and transformational during these very difficult times,” Kabateck said. “They are spending a little more to get a little more customer foot traffic and that’s encouraging to see.”