A new survey from Guidant Financial looked at small business trends. The report surveyed 2,400 current and aspiring small business owners and was completed in late 2020. The survey covered everything from the fallout from COVID-19 to the biggest obstacles they current face as small business owners.
Here are a few of the top take-aways from the survey.
- Drop in profitability: This should come as no surprise, but there was a 19% decrease in profitability for small business owners from 2019. However, the good news is that more than 75% expect their small business to survive, with only 4% predicting that their business would fail.
- Only 5% of business owners had layoffs: This is most likely due to most small businesses having a small staff, but even so, the numbers are still surprising. However, with 10% of business owners cutting their own wages in 2020, perhaps those cuts allowed them to keep their staff intact.
- Assistance programs were readily used: 61% of small business owners indicated that they received either Paycheck Protection Program (PPP) or Economic Injury Disaster Loans (EIDL) funds for their business in 2020.
- Cash was the most popular way of funding a small business: 39% or respondents indicated that they used cash to start their business, followed by the Rollovers for Business Start-ups, which allowed those with 401(k) funds to roll over funds to start their business. Only 5% percent reported obtaining an unsecured loan in order to start their business.
- Small businesses come in a lot of sizes: 44% of small business owners surveyed indicated that they had between 2-5 employees, with only 1% having more than 100 employees.
Aside from COVID-19, small business owners faced an additional set of challenges, with lack of capital (23%), employee recruitment and retention (19%, and marketing and advertising challenges (15%) topping the list. But despite these challenges, only 9% of business owners indicated a desire to sell their business.
But it’s not all bad news. 51% of small business owners indicated that they were planning on expanding their business or add staff in 2021, with 10% wanting to open a new location.
With the country beginning to open up from the forced pandemic closures, it’ll be exciting to see what 2021 holds for small businesses.
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Tags: Small Business
