Small business owners say that they expect to grow revenues in 2021, as more people are vaccinated against COVID-19 and the economy reopens.
That’s according to the 2021 Small Business Survey from TD Bank, which released its findings this week.
“COVID-19 required small businesses to adapt to new business operations and incorporate new revenue-generating strategies nearly overnight,” Jay DesMarteau, head of TD Bank’s Commercial Distribution, said in a statement.
“Entrepreneurs are incredibly resilient, though, and it is encouraging that they report a more positive outlook and do not anticipate losing their livelihood,” he added.
More than 750 small businesses, with less than $5 million in annual revenue, from across the country responded to the survey, which was conducted from March 12 through March 19.
The survey found that 41 percent of owners expected to grow revenues, while 9 percent said they expected a decline.
In the next 12 months, 57 percent said they planned to expand hours, operations or both. And 9 percent expected to open a location within that same time frame.
According to the survey, there may be fewer Main Street vacancies than anticipated, with 3 percent expecting to close a location permanently. Meanwhile, 2 percent are planning to sell their business.
But they are not without struggle. The chief challenges are the national economy, according to 43 percent and operational restrictions surrounding COVID-19, according to 41 percent. Navigating around a decrease in revenue is yet another challenge.
More than 66 percent said federal programs such as the Paycheck Protection Program and the Economic Injury Disaster Loan was helpful, but still needed more funding.
In the survey 66 percent said they still process payments by collecting checks and cash, making these physical transactions the most popular payment method. One-third of respondents use person-to-person payments like Zelle or Venmo, ecommerce/online sites (28 percent) or electronic transfer such as ACH payments (28 percent). Just 19 percent report using a traditional point of sale system.
When considering finances, 58 percent said they have no loan or line of credit needs, although one in three applied for a loan – including PPP – or line of credit in the past year. This is higher than 2019, when just 20 percent of businesses had applied for a loan or line of credit and 62 percent had no credit needs.
Now 14 percent said they would apply for a loan or line of credit in the next year, and 60 percent said they have a credit card to cover business purchases. The survey found that 42 percent use cash back or other credit card rewards to fund critical expenses.
“Although funding programs like PPP provided much-needed stimulus for small businesses, there is a sense of caution about taking on new debt this year,” DesMarteau said. “Business owners should speak with their banker to understand the benefits and risks related to various credit products and better understand how credit could potentially accelerate growth.”