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Small and midsized U.S. businesses are applying lessons learned during the pandemic as they plan for the uncertain year ahead.
Three-fourths of midsized and more than 60 percent of small businesses remain optimistic about their own performance in the year ahead, even as they continue to face the impact of a global pandemic, according to the annual JPMorgan Chase Business Leaders Outlook survey released on Tuesday.
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However, fewer small businesses anticipate revenue and sales growth for the year ahead, down to 47 percent from 60 percent last year. The outlook for midsized businesses is a bit brighter. Sixty-nine percent expect to see revenue and sales growth in 2021, relatively unchanged from 70 percent a year earlier and before the start of the pandemic.
Businesses responded to 2020's economic realities by rapidly adapting their operating models and strategies to maintain success in the new environment, including:
Remote work. The majority of midsized (84 percent) and small (72 percent) businesses have moved some or all of their workforce to remote work over the past year.
Cash buffers. Nearly two-thirds of midsized businesses and one-third of small businesses have increased cash reserves as a cushion for potential future disruptions.
Digitized payments. More than half of midsized businesses have increased their use of online banking and treasury tools, including electronic payments. Small businesses have moved toward contactless payment options.
New paths to capital. Nearly half of small businesses have explored online lending in the past year, with 25 percent procuring an online loan. For the upcoming year, 56 percent say they would be open to obtaining an online loan if they find themselves needing capital.
As businesses plan for 2021, JPMorgan Chase encourages them to prepare for some bumps in the road in the return to normal, embrace technology and remain vigilant.
"Businesses have weathered many storms over the past year, displaying impressive levels of creativity and adaptability as they shifted to new operating models, distribution channels and technologies," said Jim Glassman, head economist for JPMorgan Chase Commercial Banking. "The challenges aren't over, but their tenacity has helped sustain economic momentum and offers optimism for recovery in 2021."
Alan Goforth
Alan Goforth is a freelance writer in suburban Kansas City. In addition to freelancing for several publications, he has written a dozen books about sports and other topics.
