CHERRY HILL, N.J., May 2, 2019 /PRNewswire/ -- Small business owners
(SBOs) across the U.S. expect larger increases in revenue this year
than in 2018, despite growing trepidation about the national
economy and inflation, according to the 2019 Small Business Survey
conducted by TD Bank, America's Most Convenient Bank®.
SBOs show continued optimism about their businesses' prospects,
with 54 percent anticipating revenue growth, compared with 52
percent who expected such gains in 2018.
Hiring also is on business owners' minds. Twenty-three percent
said they will increase staff this year, compared with 21 percent
in 2018. To support and fuel growth plans, business owners are
primarily focused on expanding product lines/services (46 percent)
and expanding production (39 percent) in 2019, and 43 percent will
seek credit.
What's not impacting the bottom line? Tax reform. Sixty-four
percent of SBOs said they did not benefit from tax code revisions,
in line with last year's survey when nearly half of respondents
stated the Tax Cuts and Jobs Act would not aid their business.
However, 90 percent do think at least one of the provisions could
benefit future filings.
While SBOs remain confident, they are watching external
pressures that could challenge operations over the next 12 months.
According to respondents, their top obstacles include the health of
the national economy (37 percent), inflation (21 percent) and
finding qualified workers (18 percent).
Main Street Matters
SBOs may feel some pressure from
the economy and expansion, but their commitment to their
communities remains a major priority. When asked what they do as a
business owner to support their community, 62 percent cited using a
bank with area locations; 40 percent named living their business'
neighborhood; 32 percent said participating in local activities
such as charity events and volunteer work; and 25 percent stated
hiring employees who live in the area.
Respondents take obvious pride in their businesses and
communities. When asked why they started their own business, SBOs
said:
- Desire to be their own boss (60 percent)
- Passion for the industry (41 percent)
- Desire to invest in and serve their local community (14
percent, which climbs to 28 percent for those under the age of
55)
"Small business owners frequently report a positive outlook for
their business, but they need to create strategies that account for
growing headwinds and plans for how to increase revenue while
reducing costs," said Jay
DesMarteau, Head of Commercial Specialty Segments at TD
Bank. "Small businesses often are called the backbone of the
American economy, and their continued dedication to their
communities is important whether they are an internet-based
business or a storefront. This commitment makes small businesses
valuable assets to their region and can help shelter SBOs from some
national pressures."
Preparing for the Future
Although many SBOs still
value offering the "mom and pop" experience, longevity depends on
making their business more efficient and attractive to customers.
Not surprisingly, technology and digital investments, from banking
transactions to point of sale systems, drive this evolution. SBOs
report confidence in their ability to use digital/online banking
features (76 percent) and the latest online payments and POS
technology (63 percent), showing they are committed to adapting to
a changing consumer landscape and creating efficiencies that save
resources.
SBOs are also more enthusiastic about integrating payments
technology. When asked how they collect customer or vendor
payments, respondents named electronic transfers like ACH (26
percent vs. 23 percent in 2018); person-to-person apps such as
Zelle (23 percent vs. 19 percent); and e-commerce (24 percent vs.
23 percent), although checks/cash still rule. Many SBOs also view
incorporating payments technology as an investment, with 12 percent
of respondents adding mobile POS capabilities to their business
offerings to increase revenue and/or profits.
Long-term planning as a business owner also means creating a
strategy for exiting that business. While retirement and succession
planning are crucial, this does not appear to be a priority for
many SBOs, with 59 percent of respondents stating they do not have
a retirement/ succession plan in place, while 27 percent do and 14
percent are altering their strategy. Those who do have succession
plans said they would:
- Pass the business to family/co-workers (27 percent)
- Close the business (22 percent)
- Sell the business (17 percent)
"Understanding and harnessing the convenience of technology is
critical to how a business will serve customer needs and create
scale and efficiencies in their business," DesMarteau said. "SBOs
are wise to invest the same amount of effort into planning for
their eventual exit as they put into revenue and payment
strategies. Business owners should work with a financial planner to
create a comprehensive plan that sets their business – and
themselves – up for long-term success."
Survey Methodology
The study was conducted by
MARU/VCR&C among a nationally representative group of small
business owners from April 1-15,
2019. Included were small businesses of $5 million or less in revenue. The sample of 797
business owners has a margin of error of +/- 3.5 percent.
About MARU
MARU/VCR&C is a professional services
firm dedicated to improving its clients' business outcomes. It
delivers its services through teams of sector-specific research
consultants that have technology in their DNA, specializing in the
use of Insight Community and Voice of Market technology.
MARU/VCR&C's research drives decision-making across all aspects
of customer experience, including innovation, product, branding,
commercialization and communications.
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 million customers with a full range of retail, small
business and commercial banking products and services at more than
1,200 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".
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SOURCE TD Bank