APPLETON, WI – December 15, 2020 – The COVID-19 pandemic took a toll on Northeast Wisconsin businesses in 2020, but many area executives retain an optimistic outlook for 2021 and beyond, according to results of the annual survey of businesses conducted by First Business Bank.
Completed just before the U.S. Presidential election and news of a promising vaccine, the 2021 Business Statistics & Trends Survey received responses from 300 business leaders in Greater Dane County, Southeast Wisconsin, Northeast Wisconsin, and Kansas City Metro. Across all markets, 36% of survey respondents reported better-than-projected results in 2020, 21% reported as-expected results, and 43% said their businesses performed worse than projected.
Now in its 12th year in Northeast Wisconsin, survey results this year showed 43% of respondents report their businesses performed below expectations, up from 25% in 2019. However, in positive news: 57% report either meeting or exceeding expectations in 2020, and, in fact, those reporting that their businesses exceeded expectations grew from 29% in 2019 to 36% in 2020.
Business leaders attributed shortfalls overwhelmingly to the pandemic. At the same time, others credited investments in technology, expanded product offerings, and opportunities created by the pandemic for their success.
“It’s a tale of two economies,” said Susan Finco, Owner & President of Leonard & Finco Public Relations. “You have one group doing great, and another that’s miserable. I don’t think we’ve seen anything like that. But there’s optimism on a few levels. There’s a belief that after the vaccine it’ll be ‘Katie, bar the doors’ for the hospitality industry because people want to get out there. I was pleased to see that optimism reflected in the survey.”
“We’ve been living with this and we’ve learned how to cope with it,” said Rick Hearden, President – Northeast Wisconsin Market for First Business Bank. “It seems like there are brighter days ahead. We tend to be pretty optimistic people. To steal words from my 91-year-old dad who was out playing golf in May, he said, ‘I’m 91 years old and I’m not going to stop living.’ We just have to find different ways to do it.”
Looking ahead for 2021, Chris Hess, President & CEO of Goodwill Industries of North Central Wisconsin, said “It’ll be hard to surprise me because it’s 2020 and we’ve been through a lot, but the war on talent will continue. Companies will be competing for resources and leadership as we move into a new normal. It takes different talent and, being in a business where we train people for jobs for a living, we’ve got a keen eye on what that means for the people we serve. Now it’s a normal job requirement to use Zoom.”
Sales & Profitability
Almost an equal percentage of respondents experienced an increase in sales revenue (38%) compared to those who reported a decrease in sales in 2020 – 38%. By contrast, in 2019, 56% saw increased sales revenue and 16% reported a decrease. Profitability reflected similar changes: 38% reported higher profits in 2020 (down from 49% in 2019) and 40% saw lower profits, up from 25% in 2019.
Hiring & Wages
In 2020, most respondents reported no change in their number of employees (56%), while 20% said they increased employees (down from 33% in 2019), and 24% reported a decrease. Half (50%) of business leaders reported wage increases at their businesses in 2020, while 12% report decreased wages, up from 7% in 2019.
Expectations for 2021
Plowing through the pandemic, business leaders expect starkly improved performance in 2021, although the majority (58%) cite an inability to forecast with certainty as a major challenge next year. For 2021, 62% of respondents expect better overall business performance, and just 13% expect worse performance. A combined 83% anticipate increases or no changes in sales revenue; 80% also expect either an increase or no change in profitability next year. Almost two-thirds (64%) forecast higher wages at their businesses in 2021.
A summary of the results and reaction from local business leaders is available through the First Business Bank Podcast. Other statistics include:
- 65% report employees working remotely in 2020
- 64% project increasing wages in 2021
- 62% expect the COVID-19 pandemic to disrupt their businesses through the end of 2021
- 60% forecast increased sales revenue in 2021
- 58% predict increased profitability in 2021
- 55% said their businesses were temporarily shutdown or running below capacity in 2020
- 47% report disrupted business travel affected their organization in 2020
- 46% plan to maintain the same number of employees in 2021
Download the full 2021 First Business Bank survey report.
About First Business
First Business Financial Services, Inc. (Nasdaq: FBIZ) is a Wisconsin-based bank holding company focused on the unique needs of businesses, business executives, and high net worth individuals. First Business offers business banking, specialty finance, and private wealth management solutions, and because of its niche focus, provides clients with unmatched expertise, accessibility, and responsiveness. Member FDIC, First Business Bank's corporate headquarters are at 401 Charmany Drive in Madison, WI. For additional information, visit www.firstbusiness.bank or call 608-238-8008. The First Business Bank logo is available at https://firstbusiness.bank/logo/ .