Small Business Survey Finds 37% Considering Expansion in 2021
More than a year after the pandemic first gripped the United States, small business owners are apparently feeling optimistic once again. TD Bank recently released the results of their 2021 Small Business Survey. The survey — which included participation from 750 small businesses with less than $5 million in annual revenue — found that many businesses are now “doing better than expected” as vaccination rates rise and the pandemic (hopefully) recedes. In fact, 41% of small businesses now anticipate their 2021 revenue to grow, with only 9% foreseeing a decline.
Going hand in hand with that optimism, a number of business owners surveyed report eyeing expansion. According to the survey, 37% of respondents plan on expanding their products and services in a bid to grow their revenues this year. Meanwhile, as the nation begins to normalize, 57% of businesses say they will expand their hours and operations. Additionally, 9% foresee opening new locations within the next 12 months. More importantly, 16% expect to increase their workforce this year while 73% will at least keep their employment numbers at the same level.
Of course, while things are looking up, several small businesses relied on loans and other financing to help them through the past year. TD Bank found that one-third of respondents had applied for a loan or line of credit in the last 12 months. This figure includes those that applied for the popular Paycheck Protection Program (PPP). By comparison, only one-fifth of those surveyed in 2019 had taken out a loan in the year prior. On the other hand, 58% of respondents in this year’s survey said they currently had no need for a loan.
The survey also found that the majority of business owners utilize credit cards to manage their business finances. Overall, 60% reported using a credit card to pay for business expenses. This practice can also result in a bonus benefit as many business cards offer cashback on purchases. In fact, 42% of businesses report tapping their cashback and other business credit card rewards to make additional business purchases.
Commenting on the survey results, TD Bank Head of Commercial Distribution Jay DesMarteau stated, “COVID-19 required small businesses to adapt to new business operations and incorporate new revenue-generating strategies nearly overnight,” adding, “Entrepreneurs are incredibly resilient, though, and it is encouraging that they report a more positive outlook and do not anticipate losing their livelihood.” DesMarteau also pointed out, “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. 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.”
There’s no doubt that the results of this TD Bank survey and others are encouraging to see. After a hard-fought year, it seems as though many small businesses have turned a corner and are setting a path forward. Although there are still reasons to be cautious, the resilience and optimism shown by business owners will surely serve them well as recovery continues.