83% Of Small Business Owners Report Optimism For 2021
New Sentiment Survey Shows Reboot is Underway; Majority Expect Improvements in Growth, Hiring and Technology
A new sentiment survey of small and medium-sized business (“SMB”) owners describes their outlook for 2021 as optimistic despite the significant impact of COVID-19 on business performance throughout 2020. The report, authored by GGV Capital and Hello Alice, also suggests that business owners expect an uptick in hiring, technology purchases, and overall growth.
There are 30 million SMBs in the U.S., employing 60 percent of Americans and representing 40 percent of U.S. GDP. According to the data, 64 percent of 4,100 SMB owners surveyed said their business performance was worse in 2020 than in 2019, and 45 percent were forced to lay off employees. Also, businesses owned by women, people of color, and U.S. veterans have been impacted disproportionately by the pandemic and other challenges of 2020.
In contrast, the sentiment for 2021 reflects the resilience of small business owners to find new ways to reach customers, leverage technology to accelerate growth, and adapt operations to survive and thrive, resulting in significant optimism for next year.
- 83% believe their business will perform better in 2021 than in 2020 (4,106 owners).
- 93% plan to hire in 2021 compared to 45% that laid-off employees in 2020 (4,111 owners).
- 75% intend to spend more on technology in 2021 than in 2020 (784 owners).
- 75% called on the government for assistance in the form of emergency grants, long-term grants, and rent relief (97,341 owners) even though only 52% (of 4,134 owners surveyed) applied for loans from the Paycheck Protection Program due to the program’s lack of access and focus on SMBs.
GGV Capital’s SMBTech Index, also launched today, underscores these findings and suggests a similarly positive outlook and strength in small business development. The Index, now 22 publicly traded companies that provide the technology that powers small businesses, has grown from approximately $15 billion in public market value in 2010 to $200 billion in 2018 and $566 billion today.
“The U.S. economy is in the first inning of a massive reboot after the Covid-19 pandemic, and small business owners are leading the way. They are spotting opportunities, starting new companies, and embracing technology as a way to adapt and build enduring businesses,” said Jeff Richards, Managing Partner, GGV Capital.
“In a year of tragedy impacting human life and small businesses, entrepreneurs continue to hold an optimistic mindset,” said Elizabeth Gore, Co-Founder and President of Hello Alice. “This data will ensure all business owners get the resources they need to survive this year, but most of all, it will show a thread of optimism in the stories that help illuminate the tremendous diversity and value found among this country’s entrepreneurs.”
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