M&T survey shows business owners pessimistic about economy, looking to retire

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An M&T Bank survey comparing the answers of large and small business owners show that business owners have become more burnt out, have grown more pessimistic about the country’s economic future and have had to use more digital tools over the course of the pandemic.

The Business Owners Outlook report, which surveyed 1,007 small business owners nationwide, also noted disparities between minority and non-minority business owners’ experiences during the pandemic, with business owners of color reporting more difficulties accessing paycheck protection plan loans. 228 of those surveyed identified as people of color. 

Business owners of color were 43% more likely to report that they had faced hurdles trying to access paycheck protection program (PPP) loans. These hurdles could include having trouble generating the necessary documentation to apply for the loans or loan forgiveness, having difficulties with the online application or having trouble understanding requirements for loan forgiveness.

In addition, the majority of businesses without employees, which can include sole proprietors, self-employed individuals and independent contractors, are women and people of color. But these businesses were largely locked out of receiving PPP loans.

“The challenges faced by women and (entrepreneurs of color) were, unfortunately, not unique to PPP. In normal times, these groups have historically faced obstacles in gaining equitable access to capital, career connections and a strong banking relationship,” said Detra Miller, head of minority- and women-owned business banking for M&T Bank, in the report. “Because of the unconscious and conscious biases that persist in society, many of these businesses have struggled to build the financial cushion to survive the economic impact of the pandemic.”

26% of all small business owners, which in this survey includes those making between $1 million and $4.9 million in annual revenue, found the PPP process very or extremely difficult.

The pandemic has also led to burnout, with the number of business owners planning to retire soon doubling for small businesses since last August, and more than doubling for large businesses. The number of large business owners that want to sell their businesses earlier than expected has increased by 31%.

“Exhaustion may be playing a significant role in the growing interest in transition. After making it through the pandemic, enough may be enough for some owners,” said Stuart A. Smith III, national director for business value strategies for Wilmington Trust and M&T Bank, in the report. “Dealing with two major economic events in less than 15 years may have them wondering if it’s time to take money off the table, especially as they near retirement.”

On the other hand, many owners report introducing new digital advancements to their business over the course of the pandemic, with e-commerce functions, new technology, increased social media use and digital advertising being cited as the top four areas for increased digital investment.

Most business owners, including 60% of small business owners, say their businesses have benefited from these investments. However, only 40% of small business owners, as opposed to 58% of large business owners, say that they will reinvest in these technologies.

“There is definitely a permanence to digital adoption among small and mid-sized businesses as customer demands have changed,” said Cecilia Hodges, M&T Bank’s regional president for Greater Washington and Virginia, in the report. “The digital offerings available to improve finance, operations, and marketing continue to open the door for new, exciting opportunities. If done right, initial investments will be well worth it long-term in improving efficiency, productivity and a business’ bottom line.”

Going forward, only 24% of respondents reported feeling very optimistic about the outlook of the U.S. economy over the coming year, a decline from the 42% of respondents who said the same in March 2020, while only 34% were very optimistic about their business’s ability to achieving its financial goals.