What You Need to Know
- The number of owners who are pessimistic about the U.S. economy has nearly doubled since March 2020, the survey found.
- Owners' confidence in passing their business along to a successor is eroding.
- Entrepreneurs of color were more likely to report difficulty getting a PPP loan.
Business owners’ confidence has plummeted by about 30% since the onset of the pandemic and the number who plan to retire earlier than expected has nearly doubled, according to the latest Business Owners Outlook from Wilmington Trust, developed in collaboration with its parent company, M&T Bank.
The study was conducted Jan. 25 through Feb. 10 among 1,007 business owners, including 228 who identified as people of color, with annual revenue of $1 million or more.
Pandemic Wreaks Havoc
The survey found that the number of owners who are pessimistic about the future of the U.S. economy has almost doubled since March 2020.
Roughly half said they expect lower or flat revenue in 2021 versus pre-pandemic figures.
Owners’ confidence in achieving their business’s long-term financial goals dropped from 57% to 34%.
Owners have also been pushed to ramp up digital investments to respond to changing consumer behavior: 1 in 3 entrepreneurs said they have increased their investments in technology during the pandemic.
Their top priorities include e-commerce, overall tech equipment/infrastructure, social media and digital advertising.
The increased focus on technology and the investments required, however, may be giving older owners second thoughts about how long to remain at the helm.
Since August, the number of owners of larger businesses who plan to retire sooner than expected shot up by 110%, while the number doubled among owners of smaller companies, according to the survey.
Not only that, their confidence in passing their business along to a successor is eroding. Whereas in March 2020, half or owners expressed high confidence that their personal and business assets would be well-managed if they were to die or become unable to manage them, only 34% in the latest survey said the same.