CHERRY HILL, N.J., July 23, 2020 /PRNewswire/ -- More than half
(58%) of small business owners (SBOs) report they expect their
revenue to decrease in 2020, even though 47% stated they did not
have to close for any amount of time during the COVID-19 pandemic,
according to results of TD Bank's Small Business Recovery Survey
released today by TD Bank, America's Most Convenient
Bank®. Conversely, just 16% of SBOs expect to see any
increase in revenue in 2020, while 26% project it will stay the
same.
The TD Bank Small Business Recovery Survey polled 750 small
businesses nationwide with less than $10
million in annual revenue and 250 or fewer employees.
Businesses with annual revenues of $500,000 or less, which comprised 59% of the
survey respondents, were more likely than those with higher annual
revenues to state that they expect significant 2020 revenue
decreases (loss of 10% or more), with 38% of this group making such
projections.
Many SBOs have sought assistance. Forty-three percent of survey
respondents participated in the Small Business Administration's
Paycheck Protection Program (PPP). Of those businesses in the
survey that received a PPP loan, 60% have annual revenues of
$1 million or less.
Little planning or pivoting
Small businesses were ill-equipped to cope with the challenges
of COVID-19, according to survey data. An overwhelming 81% of SBOs
said they did not have a disaster or crisis plan prior to pandemic
shutdowns. Further, 31% of respondents did not make any changes to
business operations or strategy to adapt to the circumstances. Of
the 69% of SBOs that reported implementing one or more changes:
- 28% added work from home capabilities
- 27% reduced operating hours
- 20% temporarily or permanently laid off staff
- 18% incurred extra costs for additional cleaning
- 13% moved their business online
What's more, only half of respondents reported making any
business adjustments to better serve their customers or clientele,
although millennial and Gen Z business owners (ages 18-39) were
nearly twice as likely as Gen X and baby boomer SBOs to make
changes to accommodate customers during this time. SBOs who did
modify operations for their customers added virtual functions like
appointments/telehealth or conferences (25%); created a new
delivery or pick-up service (15%); and developed e-commerce/online
sales (11%).
"Owning and operating a small business is full of challenges in
good and bad times, but COVID-19 has presented unforeseen and
unique circumstances over a longer time period than most business
owners have ever experienced," said Chris Giamo, Head of Commercial Bank, TD Bank.
"Those business owners who are willing and able to adapt their
business model and overall mindset are the ones who are better
positioned to weather these unprecedented times."
Uncertainty lies ahead
SBOs expressed mixed sentiments related to their financial
outlook and external factors that could affect their business
operations. Fifty-five percent stated they will seek funding but
just 7% of participants expressed concern about their ability to
obtain a loan in the next year. The top near-term challenges for
SBOs are:
- Health of economy (national and local): 69%
- Getting paid on time or without significant delays (not more
than 30 days): 25%
- Presidential election and potential regulatory changes:
24%
- Supply chain disruptions: 21%
When thinking about the future, the majority of SBOs (69%)
acknowledged that they need to prioritize building stable financing
and cash reserves, enhancing their business model flexibility, and
improving budgeting and accounting methods to cut costs to better
prepare for future crises. While a large opportunity also exists
for SBOs to digitize their payment methods in a time when fewer
consumers want to handle cash due to health concerns, only 15% of
businesses identified this as a future priority. In fact, 75% of
small businesses reported accepting cash and checks, making it the
overwhelmingly preferred method of point of sale (POS) or vendor
payments, while only a third use electronic payments such as ACH
and 28% use either a cloud-based or traditional POS system to
process credit card payments.
"A business owner's banker should be a primary resource for
financing ideas and solutions to optimize business plans and
operations," said Jay DesMarteau,
Head of Commercial Distribution, TD Bank. "The pandemic has
accelerated consumers' and vendors' expectations to have more
options available when working with businesses of any size, from
contactless payments to remote purchasing. By working with trusted
professionals like a bank, accountant or attorney, business owners
can gain insights that could help drive efficiencies and better
long-term plans."
Survey Methodology
The study was conducted
among a representative group of 750 small business owners across
the United States from
June 5-11, 2020. The survey was
hosted by global research company ENGINE INSIGHTS.
About TD Bank, America's Most Convenient
Bank®
TD Bank, America's Most Convenient Bank, is
one of the 10 largest banks in the U.S., providing more than 9.5
million customers with a full range of retail, small business and
commercial banking products and services at more than 1,220
convenient locations throughout the Northeast, Mid-Atlantic, Metro
D.C., the Carolinas and Florida.
In addition, TD Bank and its subsidiaries offer customized private
banking and wealth management services through TD
Wealth®, and vehicle financing and dealer commercial
services through TD Auto Finance. TD Bank is headquartered in
Cherry Hill, N.J. To learn more,
visit www.td.com/us. Find TD Bank on Facebook
at www.facebook.com/TDBank and on Twitter at
www.twitter.com/TDBank_US.
TD Bank, America's Most Convenient Bank, is a member of TD Bank
Group and a subsidiary of The Toronto-Dominion Bank of Toronto, Canada, a top 10 financial services
company in North America. The
Toronto-Dominion Bank trades on the New
York and Toronto stock
exchanges under the ticker symbol "TD". To learn more, visit
www.td.com/us.
Media Contact:
Martha A. Gaston, APR
TD Bank
VP, Senior Corporate Communications Manager
Martha.Gaston@td.com
View original content to download
multimedia:http://www.prnewswire.com/news-releases/most-small-businesses-project-revenue-decreases-due-to-covid-19-despite-nearly-half-avoiding-forced-closures-td-bank-survey-shows-301098671.html
SOURCE TD Bank