This has been a challenging year for many small businesses, as COVID ebbs and flows across the country, impacting consumer behaviors. But many small businesses are rising to meet the challenge. I recently talked to Sharon Miller, the President of Small Business at Bank of America, to get her insightful perspective. Here is part of our conversation.
When we last talked about the Bank of America 2021 Small Business Owner Report, we saw that business owners were more optimistic and confident about the economy than in fall 2020. However, a recently released NFIB report says business owners’ optimism “has hit a wall.” What do you see? Are business owners confident about the upcoming holiday season?
Sharon Miller: 2021 has certainly been a year of confronting challenges, adapting, and innovating for small business owners across the country. Despite recent world events and concerns, small businesses continue to launch at record levels, as applications to start a business were up 41% year-over-year, according to the U.S. Census Bureau. They also found that more than five million new small businesses were started over the last year, which far exceeds the typical rate of openings following recessions.
Our research at Bank of America also shows small business owners remaining positive and hopeful for the future of their businesses and our economy. Our Summer 2021 Black Business Owner Spotlight found that over the next 12 months, nearly half of Black entrepreneurs expect their revenues to increase and the economy to improve at both the local and national levels. Additionally, roughly one-quarter plans to increase hiring efforts. We expect this trend to continue and to see renewed investment and new business creation as we head into 2022.
We also expect to see a robust holiday shopping season this year and a continued shift to online shopping and home delivery in light of the ongoing pandemic.
Do you think 2021 has been a year of recovery, transformation, or running in place? How do SBOs take steps to move forward?
Miller: 2021 has been a year of transformation for small business owners across the country. Many entrepreneurs have been forced to reinvent their operations over the past year, and they also had to comply with local, state, and federal mandates around COVID-19 restrictions. We expect this business transformation to continue. I’ve been consistently impressed by the creativity and flexibility business owners have shown while implementing new operational norms for their employees and customers.
Over the next few months, I’d expect to see small business owners continue prioritizing their employees’ and customers’ health, wellness, and safety. These entrepreneurs are still working to regain their footing as economic confidence, business revenue expectations, and hiring plans all continue to trend in the right direction.
Moreover, I anticipate that entrepreneurs will continue to prioritize investing in their communities, which proved to be a huge source of support during initial pandemic-related lockdowns. Our surveys found that local business owners have been giving back to their communities by donating their time, products, and services to assist their communities. And the positive impact on local economies is evident.
Many people are buzzing about the “Great Resignation,” with so many employees looking for greener pastures. So how can SBOs hang on to employees?
Miller: Small business owners are keenly aware that they need to continue investing in higher wages, improved benefits, and increased flexibility for their employees. We’ve seen that many business owners are prioritizing employee wellness and benefits as a result of the pandemic—86% of Black business owners have changed or plan to change their approach to employee wellness and benefits, according to the Summer 2021 Black Business Owner Spotlight. The top changes include allowing employees to have a more flexible work schedule, enabling employees to work remotely, and offering more paid time off or vacation. Given the emphasis on remote work and the shifting desire of employees to be able to work from anywhere, these changes are going to be key in employee retention.
Another positive is we’ve seen so many consumers increase their support for small businesses. How can SBOs continue to encourage that support?
Miller: The renewed support for small businesses has truly been amazing. The pandemic-related closures in the spring of 2020 were a shock to our economic system. This was the first time many consumers realized how closely these small businesses are interwoven with their communities. Many business owners saw an outpouring of support from their communities. Our 2021 Small Business Owner Report found that 32% of business owners reported that it was key in helping them navigate the pandemic. That same survey found that over a quarter of business owners were also giving back to local community groups and supporting social causes tied to recent social justice movements, which is great to see. Going forward, small business owners should continue to engage with their communities, expand their customer base and demonstrate the value of shopping local.