MADISON, WI – December 15, 2020 – The COVID-19 pandemic took a toll on Greater Dane County businesses in 2020, but many area executives retain an optimistic outlook for 2021 and beyond, according to results of the 18th 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.
Locally in Dane County, 47% of business leaders said their companies’ overall performance was below expectations in 2020, up from 27% in 2019. Another 33% of survey respondents reported better overall performance than projected, slightly higher than 2019 (29%). Almost every company reporting underperformance cited the pandemic as the primary disruptor, however, it also created opportunity for some businesses.
One-third of businesses that outperformed cited “opportunities created by the pandemic” as the reason for better performance.
“I was relieved by the results,” said Tara Conger, President of QTI Group. “It does showcase a brighter future than what I thought might be given considering it was such a turbulent year for everyone. COVID has really hit each business industry and sector differently. I feel for retail, arts & entertainment, hospitality, and travel industries because they’ve seen a huge impact. Overall, I was pleasantly surprised with the brighter outlook, given that most people took this survey in September and October when there was still a lot of uncertainty in the economy.”
“Comparing the survey results to other years, business results are more spotty in terms of performance,” said Mike Victorson, CEO of M3 Insurance. “We spend a lot of time across the state in manufacturing, healthcare, and construction and some clients, very quietly, are posting record years. When I looked at the results, I definitely saw what we’re experiencing as a business.”
Jim Hartlieb, President of First Business Bank, said conversations with First Business Bank clients closely mirror survey results. “In conversations with clients over the past six months, it depends on how closely they’re impacted by face-to-face consumer-type businesses, which were most heavily hurt by the pandemic,” Hartlieb said. “The other thing that came through is the optimism of CEOs and leaders in our community. Comparing it to last year, almost 80% were expecting higher revenues and profits, now this year it’s a little more muted, but again that’s pre-election, pre-vaccine. Despite all that uncertainty, the optimism really came through for me, which is great to see.”
Sales & Profitability Looking back to 2018, a record high 75% of respondents reported a sales revenue increase, which decreased to 58% reporting sales revenue increases in 2019. As anticipated, it decreased further still in 2020, as 31% reported increased sales revenue this year. In fact, 56% of executives at Greater Dane County businesses say they experienced a sales revenue decrease in 2020. Similarly, 49% saw a decrease in profitability in 2020, almost the same number (51%) that reported increased profitability in 2019.
Hiring & Wages In 2020, most respondents reported no change in their number of employees (47%), while 28% said they increased employees, and 25% reported a decrease. About half as many executives reported increased wages in 2020 (42%) compared to 2019 (88%, a record high).
Expectations for 2021 Plowing through the pandemic, business leaders expect improved performance in 2021, although the majority (58%) cite an inability to forecast with certainty as a major challenge next year. For 2021, 60% of respondents expect better overall business performance, and just 12% expect worse performance. A combined 84% anticipate increases or no changes in sales revenue; 84% also expect either an increase or no change in profitability next year. More than half (53%) forecast that wages at their businesses will increase in 2021. A summary of the results and reaction from local business leaders are available through the First Business Bank Podcast.
Other statistics include:
- 73% report employees working remotely in 2020
- 62% forecast increased sales revenue in 2021
- 59% expect the COVID-19 pandemic to disrupt their businesses through the end of 2021
- 56% report disrupted business travel affected their organization in 2020
- 51% plan to maintain the same number of employees in 2021
- 53% project increasing wages in 2021
- 49% said their businesses were temporarily shutdown or running below capacity in 2020
- 48% project increased profitability in 2021
Download the full 2021 First Business Bank survey report.
About First Business
First Business Bank specializes in Business Banking, including Commercial Banking and Specialty Finance, Private Wealth, and Bank Consulting Services, and through its refined focus delivers unmatched expertise, accessibility, and responsiveness. Specialty Finance solutions are delivered through First Business Bank’s wholly owned subsidiary First Business Specialty Finance, LLC. First Business Bank is a wholly owned subsidiary of First Business Financial Services, Inc. (Nasdaq: FBIZ). For additional information, visit firstbusiness.bank.