According to the Bank of America 2021 Small Business Owner Report, U.S. small business owners have started to regain their footing after an unprecedented year of challenges brought on by the coronavirus.
The research, based on a survey of nearly 1,000 small business owners across the country conducted in March, reveals business outlook and economic confidence have bounced back significantly from levels seen in the fall. Over the next 12 months:
- 60% of business owners expect their revenue to increase, up from 34% in fall 2020.
- 56% are confident their local economy will improve, up from 39% in fall 2020.
- 50% anticipate the national economy will improve, up from 37% in fall 2020.
- 21% plan to hire, up from 13% in fall 2020.
Furthermore, 79% of business owners say a widely available vaccine and/or herd immunity in their local community will be helpful in bringing their business back to normal, while 15% say that business is already back to normal.
“Small business owners have showed time and again during the pandemic that they are the resilient backbone of our economy and of local communities throughout the country,” said Sharon Miller, head of Small Business at Bank of America. “From providing essential services to revamping operating models, I am inspired by the dedication and passion of entrepreneurs across the country and encouraged to see their renewed optimism about the future of their businesses.”
Top economic concerns
Consistent with last fall, business owners’ top concerns for the year ahead include the U.S. political environment (71%) and health care costs (64%). Concerns that have declined significantly from last fall include the coronavirus pandemic (55%, down from 75% in fall 2020) and consumer spending (46%, down from 56% in fall 2020). Conversely, business owners expressed increased apprehension over macro factors such as commodities prices (59%, up from 42% in fall 2020), corporate tax rates (52%, up from 44% in fall 2020) and interest rate increases (46%, up from 35%).
Operating during the pandemic and the transition to digital
More than half (55%) of business owners say they faced difficulties keeping their businesses open as a result of the pandemic. As a result, many business owners made operational changes to their business over the past year, with 62% anticipating these changes will remain permanent – including:
- Continued enhancement of sanitation practices (54%)
- Further building a digital sales strategy (32%)
- Accepting more forms of cashless payments (27%)
- Maintaining shortened hours of operation (22%)
Sixty-two percent of business owners adopted new digital tools and strategies to optimize operations in response to the pandemic, including:
- Interacting virtually with customers (47%) and employees (36%)
- Banking online or in mobile apps (36%)
- Accepting digital payments (30%)
- Enhancing their social media presence (26%)
Sixty-eight percent of business owners utilized various funding sources to support their operations through the pandemic, including:
- Personal savings (48%)
- Business and/or personal credit cards (34%)
- Paycheck Protection Program loans (33%)
- Personal economic stimulus checks (23%)
- Business lines of credit (20%).
The pandemic’s impact on health and wellness
The coronavirus dealt a heavy blow to entrepreneurs – impacting not only their business, but personal wellbeing. Business owners acknowledge the pandemic’s effect on their business has impacted their mental (39%) and physical (34%) health, and more than four-in-five (85%) say the pandemic has created extra stress around running their business. However, entrepreneurs are finding healthy, productive ways to cope, including making time to unwind and do activities they enjoy (46%) and prioritizing time with friends and family (40%). When asked how they felt about running their business during the pandemic, 52% of business owners said determined/resilient, followed by stressed (48%), anxious (43%) and hopeful (38%).
Commitment to social justice
This past year sparked a greater sense of urgency and action around social justice issues – with many entrepreneurs evaluating how to address these topics within the context of their businesses. Fifty-three percent say they are committed to advocating for social change through their business and 31% say recent social justice issues have impacted their approach to conducting and running their business. Many entrepreneurs expressed benefits from committing support to social justice issues – from boosting employee morale, satisfaction and retention (31%), to attracting customers (29%) and talent (24%), and even positively impacting their bottom line (24%). Thirty-six percent say their local communities prioritize shopping at businesses with a clearly demonstrated commitment to social justice.
For an in-depth look at the insights of the nation’s small business owners, read the full Bank of America Business Advantage 2021 Small Business Owner Report.
Providing a business advantage to small business owners
Bank of America provides advice, solutions, access to capital and dedicated support to meet the unique needs of our 12 million business owner clients. According to the FDIC, Bank of America maintained its position as the nation’s top small business lender at the end of 2020, with $50.3 billion in total outstanding small business loans (defined as business loans in original amounts of $1 million and under). According to the U.S. Small Business Administration, Bank of America has been the largest PPP loan provider in the U.S. by number of approved loans, and has delivered more than $35 billion in PPP loan funds to help more than 485,000 small business clients in need.