First Citizens Bank Forecast Finds Small Businesses Optimistic for Long-Term Economic Outlook
December 08 2020 - 10:45AM
The sixth annual First Citizens Bank Small Business Forecast has
found that despite widely accepted uncertainties as a result of the
coronavirus pandemic, many small business owners remain optimistic
about the economic outlook for two to three years. Of those polled,
66% of respondents are optimistic or very optimistic for the
long-term economic outlook, which remains on par with pre-pandemic
sentiment from 2019 (68%).
“This year has been challenging and unpredictable for the world,
but our report shows that small business owners have not let the
challenges of today impact their positive perception about our
economic outlook,” said Doug Sprecher, director of sales strategy
at First Citizens Bank. “The small business community shoulders a
significant amount of responsibility and has continued to showcase
its resiliency year-after-year. Our goal is to leverage this data
to better equip business owners with the insights and counsel
needed to plan for and achieve greater business performance in 2021
and beyond.”
When compared to the near-term economic confidence, small
business owners are less confident in the conditions for the next
12 months. Of those surveyed, 57% reported being confident or very
confident in the United States’ near-term economic conditions. This
is a significant decline from 2019, where 66% of respondents felt
confident about the immediate economic outlook.
Businesses with a history of less than 10 years (77%), those
with more than 51 employees (86%) and business owners ages 18-34
(89%) are most confident in their ability to grow. This year, small
business owners in California showed the steepest decline in
near-term economic confidence with 49% (a 24% decrease from 2019)
stating they were very or somewhat confident. Conversely, the
outlook of their counterparts in Wisconsin (64%) and South Carolina
(65%) remained relatively flat in year-over-year response to
near-term economic conditions, indicating a steady confidence level
about small business owners in these regions.
Even with a decline in confidence over the next 12 months, the
survey has found the entrepreneurial spirit of small business
owners indicates continued resiliency. Although 67% said their
business has been negatively impacted by COVID-19 and 79% feel
personally responsible for the financial stability of their
employees, small business owners reported having more confidence in
their ability to grow their business in 2021 (69%) than they do in
the overall economic outlook for the U.S. (57%). Of those planning
to grow and expand their business in the next 6-12 months, 44%
indicated they will do so by hiring more employees and 26% noted
investments in technology.
Other findings include:
- Overall, business owners’ perception of being successful or
very successful during the past year declined significantly from
76% in 2019 to 69% in 2020. Florida (64%) and Wisconsin (64%)
showed the sharpest decline in business performance with a
difference of 18% and 23% respectively from 2019. North Carolina’s
(69%) perception of business success remained stable
year-over-year.
- The ongoing COVID-19 pandemic is considered very concerning by
51% of business owners and registers as the most prevalent concern
impacting their ability to meet business goals in the next
year.
- Building brand awareness through general marketing is the top
growth strategy among respondents (43%). Other strategies include
increasing current customer satisfaction and loyalty (37%),
creating new products and services (26%) and researching and
identifying new customer opportunities (33%).
- Local loyalty continues to drive positive sentiment, with 72%
of all respondents in all five markets agreeing that the state
where their business is located is a great place to start a small
business. By state, the percentage of respondents agreeing their
state is a great place to start a business are: California (61%),
Wisconsin (66%), North Carolina (72%), South Carolina (84%) and
Florida (80%).
- Banks are facing stronger competition from non-traditional
funding sources. In 2020, 43% of respondents plan to seek funding
in the next 6-12 months, with the top funding sources being
business credit cards (33%), online payment companies (16%), loans
from vendors (20%), social media (17%) and venture
capitalists/angel investors (11%).
The First Citizens Bank Small Business Forecast is conducted
annually in California, Wisconsin, Florida, South Carolina and
North Carolina to assess the motivations, sentiments and success of
U.S. small business owners. For more information or to find the
location of a local banker, visit
firstcitizens.com/small-business.
About First Citizens BankFounded in 1898 and
headquartered in Raleigh, N.C., First Citizens Bank is one of the
largest family-controlled banks in the U.S., with offices in 19
states. Drawing from over a century of experience serving the needs
of business customers, First Citizens focuses on developing
long-term relationships and offers a comprehensive array of
products and services to help small businesses manage their
finances and grow. First Citizens Bank is a major subsidiary of
First Citizens BancShares Inc. (Nasdaq:FCNCA), which has over $48
billion in assets. For more information, call toll free 1.866.FCB
4BIZ (1.866.322.4249) or visit firstcitizens.com/small-business.
First Citizens Bank. Forever First®.
Contact:Barbara ThompsonFirst Citizens Bank 919.716.2716
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