2021 has been a busy year as business owners have continued recovering their pre-pandemic vitality. Check out the results of our small business survey to see how!

Small business owners are even more confident about their businesses in 2021 than before the pandemic. What’s behind that confidence, and what are their plans and worries for the coming year?

The annual Truist survey of small business owners, conducted in March 2021, asked 527 owners (annual revenues between $100,000 and $2 million) about their recovery from COVID-19 and their plans for 2021.

Key Takeaways

Even with strong confidence, owners are stressed about the ongoing impact of COVID-19 and the lingering economic uncertainty. Change is happening across the business—touching cash management, operations, sales, and technology. As they make changes to capture new opportunities and address risks, business owners are relying more heavily on their network of advisors for guidance and expertise.

Find out more about the new realities that small business owners expect in 2021.

2021 Trends

Small business owners’ confidence in their own businesses increased, even as confidence in the strength of local and national economies dipped after rising for the previous three years. Stress levels rose, with 57% of small business owners extremely/somewhat stressed about the ongoing pandemic, economic uncertainty, and global tensions, like trade disputes.

More than 90% experienced a cash shortfall within the past year—up from 45% in the previous year—leaving small businesses to draw on cash reserves, explore business loans, and ask owners to supplement with cash infusions, owner salary holidays, and personal loans.

The number one objective for the coming year is to recover the business to where it was before the pandemic started. More than 40% of small business owners are looking to either reset their business for growth or are rethinking their long-term business goals.

Finding new customers is the top sales priority, and small businesses shifted resources away from owner-led sales to other channels. Technology investments in online presence, ecommerce, email and social media marketing, and decision support led efforts to drive sales needed to recover.

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View the full survey results >

Next: Cash Flow survey results >

Business approach for 2021

Covering cash shortfalls

Cash flow has been a top priority for small businesses over the past year. Ninety-one percent of small businesses experienced a cash crisis—double the amount from the previous year—and 86% of owners saw their personal finances affected by a business cash shortfall.

The past year’s experiences won’t fade from memory quickly. With the average small business having 3.7 months of cash reserves and 23% having less than a month of cash on hand, building cash reserves to cover shortfalls is a top objective for 2021.

Making it easy for customers to pay keeps cash flowing, but small businesses have room for improvement when it comes to providing payment options for their customers. Only 39% feel they’re doing well at offering payment flexibility, while 44% say it’s important to them and they need to improve. After a year of moving to electronic transactions, small businesses still have a way to go—39% of customer payments are still coming from paper checks and cash.

Business pressures exposed gaps in cash monitoring and forecasting. Just two years ago, small businesses were confident in their cash management abilities, with 55% saying they were “doing well” and only 30% saying they “needed to improve”. Those numbers are quite different today—only 44% are “doing well” and 43% cite the need to improve.

Small businesses now take 25% longer than a year ago to invoice customers after delivering their product or service. And once they do, fewer issue invoices as “due on receipt”. Prompt invoicing and tightening up on payment terms are priorities for the coming year. 

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Next: Financing survey results > 

Top opportunities to better manage cash flow

Funding recovery and growth

Growth—whether recovering your sales to where they were or expanding to new levels—often requires investment. Small businesses that are confident in their 2021 plans are the most likely to seek financing. When it comes to growth, small businesses say they need to increase efforts to find new customers and develop new business segments—both of which will require access to growth funds.

Business and personal credit cards will be the number one source of funding. Small business owners will look to cash on hand, business loans, government loans (including CARES Act and SBA), and equity infusions from owners and investors. With higher financing needs, use of many of these sources is expected to increase in 2021.

Eighty-two percent of small business owners expect conditions to improve in the next 6 months, and they know they’ll need to invest to take advantage of the opportunity. Technology investments will lead the way, with 44% of small businesses planning to pay for online/ecommerce/website, 41% investing in email/social media/search engine marketing, and 31% opting for decision support capabilities. Developing new products and marketing in more profitable niches will also be top investment priorities as the year progresses.

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Next: Personal finances results >

Finding funding for 2021

Owner-business ties

The line between a small business and its owner(s) is a thin one—business cash shortfalls affected 86% of small business owners’ personal finances in the past year. In what’s been a challenging year, 37% of small business owners reported recent salary cuts, and the same number took dividend reductions. Thirty-two percent of owners borrowed funds using personal credit, and 28% said they liquidated personal assets to cover business cash needs.

The personal financial impact from covering business cash shortfalls was significant. One-fifth of owners said their credit was damaged, and 40% said they had to cut back on personal spending. Still, 55% of small business owners said their businesses had a positive impact on their personal finances. The damage was concentrated on the 27% who said their small business had a negative effect on their personal situation.

Half of small business owners count on their business as a primary source of income. Many are looking for their business to deliver considerably more—23% want the business to fund their retirement, 21% need to create a valuable business asset to attract investors, and 21% seek to build a sustainable family business. 

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Impact of business cash shortfalls on owner personal finances


Reset your business for success in the years ahead.

Set up an appointment with a BB&T or SunTrust branch teammate today. Or, check out our BB&T or SunTrust resource center to learn how we can help your business and its recovery.


Source: Q1 2021 Truist nationwide survey of 527 small business owners with annual revenues between $100,000 and $2 million.

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