New Union Bank Survey Finds California Small Business Owners Feel Optimistic Despite Significant COVID-19 Investments and Gender Gaps
LOS ANGELES, April 29, 2021 -- California small business owners went to great lengths to stay afloat through the pandemic, investing an average of $28,000 to operate within government guidelines and remain open during COVID-19, according to new research from Union Bank, a leading West Coast bank.
According to the Union Bank California Small Business Mid-Year Mindshift 2021 Survey, the top four COVID-19-related areas small business owners invested in were personal protective equipment (58 percent), cleaning and sanitization services (54 percent), marketing and advertising (45 percent) and e-commerce (41 percent).
Small businesses in the restaurant and hospitality sectors spent substantially more, investing an average of $74,000, focusing on cleaning and sanitization services (94 percent), delivery services (87 percent), personal protective equipment (85 percent), and updated signage (82 percent).
"California small business owners were hit especially hard and adapted to complex restrictions for longer periods of time than those in other states," said Todd Hollander, Head of Business Banking and Small Business Banking at Union Bank. "But despite the challenges, many small businesses remained resilient and optimistic for the future. At Union Bank, we've been working with small businesses for more than 150 years and we remain committed to helping them recover and thrive for years to come."
California small business owners remain optimistic, above all.
Many small business owners in California said the pandemic had its silver linings, including improved business efficiencies (39 percent), the rewarding feeling of overcoming a challenge (37 percent) and solidifying their passion for what they do (31 percent).
They are moving forward with positivity and resilience. Six in 10 said they are currently optimistic, and 56 percent said they are more optimistic than they were in 2020. This positivity is particularly prevalent among younger business owners:
- 66 percent of business owners aged 18 to 34 said they feel positive
- 65 percent of those aged 35 to 54 said they feel positive
- 45 percent of business owners aged 55 and older said they feel positive
The most widely cited source of optimism among California small business owners was continued COVID-19 vaccine distribution, as 68 percent of respondents said they believe it will help their businesses. Among those in the restaurant and hospitality space, the federal stimulus package led the way (70 percent) as the biggest cause for optimism.
According to the survey, small business owners in California received financial support from the following sources:
Restaurant/hospitality business owners
Other small business owners
-- 64 percent from the government
-- 36 percent from the government
-- 38 percent from banks
-- 17 percent from personal finances
-- 28 percent from personal finances
-- 14 percent from family and friends
The pandemic had a disproportionate impact on women-owned small businesses.
Women small business owners said their businesses were hit harder and felt particularly unsupported during the COVID-19 pandemic, which aligns with the overall disproportionate impact that women say the pandemic has had on them.
More women business owners said they felt powerless during the pandemic, with 64 percent saying they felt they had no control over the situation (versus 54 percent for men). They also reported higher median revenue losses: 50 percent revenue loss for women-owned businesses versus 35 percent for men.
Overall, women business owners said they felt less supported by the government at all levels, compared to men:
Felt Supported By...
The Federal Government
The California Government
Their Local County Government
Their Local City Government
Above all, compared to men, women who own small businesses said they invested far less in critical changes and adjustments to help their business remain open during the pandemic. On average, they invested only $17,000, compared to $38,000 invested by men. In fact, while 20 percent of men said they spent at least $50,000 on their businesses, only 7 percent of women did.
"We know from economic data that women were disproportionately impacted by the pandemic overall, and small business owners were no exception," said Devon Barrack, Small Business Program Director for Union Bank. "This year presented many unprecedented challenges for women as they simultaneously navigated complex personal, family and professional circumstances - and to top it off, underwhelming societal support. At Union Bank, we believe diverse small businesses are the economic center of their communities and we remain committed to helping them recover from this pandemic."
Despite the clear gender gaps, women respondents said they remain optimistic and positive. Optimism levels among men and women who own small businesses are comparable, with 63 percent of men and 58 percent of women saying their current outlook is positive.
Through the pandemic, small business owners have remained resilient and closely tied to their local communities.
In the last six months alone, optimism among small business owners has risen significantly. Last October, the Union Bank Small Business Mindshift 2020 Survey showed that only 23 percent of business owners nationally - and only 13 percent in California - could see a path to survival for their businesses, but now 61 percent have a positive outlook.
This aligns with COVID vaccine distribution being well underway. In October, before the vaccine was available, 31 percent of California business owners cited the vaccine as the most important factor to business success. And now, with half of American adults having received at least one dose of the vaccine, 68 percent of business owners said the ongoing distribution will help their small business survive.
A relationship with the local community is also key to small business survival post-pandemic. The survey found that more small business owners (41 percent) felt supported by their local communities, which was more than the percentage who said they felt supported by the federal government (31 percent), their state government (30 percent), their local county government (28 percent) or their local city government (28 percent).
The relationship is also getting stronger; 41 percent demonstrates an improvement since last October, when 33 percent of the earlier Mindshift Survey's respondents reported feeling supported by their local community.
Additionally, in November, the Union Bank Small Business Holiday Spending 2020 Survey showed the importance of the relationship between small businesses and their communities. Forty-three percent of U.S. consumers said they were willing to spend $20 more on an item in order to support a small or local business, and 56 percent said they increased how much they shop and spend at small businesses to keep them afloat during the pandemic.
"Our research continues to demonstrate the critical value of the relationship between small business owners and their local communities," Hollander said. "It's our collective duty as community members to continue to uplift our local business owners as they navigate the long road to recovery."
About the Union Bank California Small Business Mid-Year Mindshift 2021 Survey
Research was gathered through a survey commissioned by Union Bank and conducted by global independent research firm Edelman Data x Intelligence. The survey was completed by 300 California small business owners (including an additional 100 owners in the restaurant and accommodations industries). Data was collected between March 4 - 19, 2021. The margin of error is +/-6 percentage points.
About Union Bank
Union Bank is a full-service bank with a rich history of investing in our clients, communities, and colleagues throughout the West Coast for more than 150 years. Union Bank provides a wide range of personal and business banking products as well as wealth management services. With 300 branches in California, Oregon and Washington, Union Bank remains committed to serving the needs of its local communities. As a member of the Mitsubishi UFJ Financial Group (MUFG), one of the world's largest financial institutions, Union Bank holds our clients' best interests to heart and remains committed to investing in their success.
About MUFG Union Bank, N.A.
As of December 31, 2020, MUFG Union Bank, N.A. operated 348 branches, consisting primarily of retail banking branches in the West Coast states, along with commercial branches in Texas, Illinois, New York, and Georgia. We provide a wide spectrum of corporate, commercial, and retail banking and wealth management solutions to meet the needs of our clients. We also offer an extensive portfolio of value-added solutions for clients, including investment banking, personal and corporate trust, global custody, transaction banking, capital markets, and other services. With assets of $132 billion, as of December 31, 2020, MUFG Union Bank has strong capital reserves, credit ratings, and capital ratios relative to peer banks. MUFG Union Bank is a proud member of the Mitsubishi UFJ Financial Group (NYSE: MUFG), one of the world's largest financial institutions with total assets of approximately ?351.7 trillion (JPY) or $3.4 trillion (USD)1, as of December 31, 2020. The corporate headquarters (principal executive office) for MUFG Americas Holdings Corporation, which is the financial holding company, and MUFG Union Bank, is in New York City. The main banking office of MUFG Union Bank is in San Francisco, California.
1. Exchange rate of 1 USD=?105.8 (JPY) as of September 30, 2020
(C)2021 MUFG Union Bank, N.A. All rights reserved. Member FDIC. Union Bank is a registered trademark and brand name of MUFG Union Bank, N.A.
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