Paula Wolf, Contributing Writer//May 7, 2021
Paula Wolf, Contributing Writer//May 7, 2021
Buffeted by the pandemic economy, many businesses invested in e-commerce and other technology to meet customer needs.
That’s one of the findings of the most recent quarterly Business Owner Outlook report from Wilmington Trust and M&T Bank. The national survey also showed that chaos brought by COVID-19 has caused some changing of the guard and early retirements.
In addition, the report spotlighted the difficulties faced by entrepreneurs of color in accessing pandemic aid.
More than 1,000 business owners whose companies have annual revenue of $1 million or more were surveyed in January and February. Here are some highlights:
For a more local perspective, Jess Seburn, M&T Bank’s Central Pennsylvania regional manager for business banking, confirmed the “digital revolution.” Companies are adapting how they sell their products, with more using online sales to deliver to the customer, he said.
Restaurants are a great example, as COVID-19 moved many to either start or expand online ordering, Seburn said. And even when eateries get back to normal, with no restrictions, online ordering will remain a revenue driver, he said.
Seburn noted that the report revealed 23% of companies interviewed planned to do more customer business via digital once the pandemic is over.
Overall, 53% are seeing a benefit from technology, including nearly 60% of small business owners.
An online ordering system requires money to set up or expand, Seburn said, and having access to the Paycheck Protection Program gave businesses more options to invest digitally.
And in-service-related fields like health care, virtual visits or telemedicine, have become much more common, he said. Thirty percent of owners surveyed plan to maintain video conferencing going forward, Seburn said.
There’s been “tremendous resilience” in the economy to maintain productivity, he said.
The adoption of digital ordering and sales means online payment, too, such as with credit cards, and businesses have become cognizant about mitigating cybersecurity risks, Seburn said.
The rapid pace of technological change is not being embraced by everyone, however. The report also found that the number of owners of larger businesses planning to retire sooner than expected jumped 110% since August 2020, while the number of owners of smaller companies planning to retire prematurely doubled.
The digital revolution possesses great potential but there’s an added level of cost, and sometimes another family member or an outsider will take over, Seburn said.
“We highly recommend owners take this time to revisit their long-term business and personal planning,” said Stuart A. Smith III, national director of business value strategies for Wilmington Trust and M&T Bank Emerald Advisory Services in a release. “To upgrade their technology, they may need to seek outside investment in the most cost-effective way possible, which will impact their valuation. But if they really are experiencing burnout and want to retire or sell sooner, they will need a well-planned transition. Beware of the quick-and-dirty exit plan, because it’s usually both.”
The survey also showed that the top three issues for business owners of color experiencing problems with the Paycheck Protection Program are generating documents for loan applications and forgiveness (46%); accessing the application online (45%); and difficulty understanding the requirements for loan forgiveness (43%).
Aspiring entrepreneur and social activist, Amaury Abreu, a founding member of the newly formed Hispanic Business Association of Lebanon, said the language barrier and not being able to understand the program process were problems for some businesses.
The association has helped by conducting workshops, Abreu said.
Kevin Schreiber, president and CEO of the York County Economic Alliance, sees consumer confidence on the rise and reasons for businesses to be more optimistic now than when the survey was completed in February.
There are rescue funds, he said, including the Restaurant Revitalization Fund, which is now accepting applications. The COVID-19 Hospitality Industry Recovery Program, or CHIRP, is already well underway. The governor’s announcement that COVID-19 restrictions, except mask wearing, would be lifted on Memorial Day, and the rising number of vaccinations should also raise optimism.
There’s hope on the horizon, Schreiber said. “Unquestionably, there was a great deal of uncertainty at the height of the pandemic. It’s amazing how far we’ve come.”
Lisa Riggs, president of the Economic Development Company of Lancaster County, also said the timing of the survey matters. In the three months since, “my sense is conditions have improved overall,” with business and consumer confidence significantly stronger.
Schreiber and Riggs agreed with Seburn that the growing dependency on e-commerce isn’t going anywhere. Consumers like the convenience of DoorDash, Schreiber said, and similar online food ordering and delivery platforms.
Riggs said there are still unanswered questions about technology’s true impact and what the economy will look like going forward.
The digital revolution has brought the influence of a new demographic into corporate America, Schreiber said.
“I do think there is definitely a rise of millennials in the workplace.”c