As a result of the COVID-19 vaccine, customers are starting to buy again through in person retail and dine out at restaurants. Accelerated consumer spending is now helping small businesses move from survival to growth mode this year.
On The Small Business Radio Show this week, I talked with Brodie Oldham , Sr. Director of Analytic Consultancy at Experian Business Information Services who leads a team of statistical consultants with diverse skills to provide small business and commercial service providers with leading edge analytic-driven information solutions. The studies that his company has conducted show consumers are bullish about a large growth rate for small business in 2021- 2022.
Interview with Brodie Oldham
According to Brodie, there are $2.4T in savings for people “with their cards out ready to spend! However, there are some factors that may hold growth back. Some economists think there will be a K shaped recovery. In some industries like movie theaters where consumers are tightly packed together, there is some angst still there. “
Brodie also believes inflation will be picking up and it will be raising commodity prices that present supply chain challenges. But he says the Fed thinks it will pare back in 2022.
Finding people for any most businesses has been difficult. Are federal unemployment benefits keeping people out of the workforce? The New York Times reported recently that in states where federal job benefits were cut, there has been no increase in employment.
Brodie says small businesses are forced to pay more money as they ramp up again, but many employees have changed industries and don’t want to come back into a service role. He notes that “we need to develop a new workforce to fill these shortages.”
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Brodie cites that small business delinquency rates continue to decline even as commercial credit originations return to pre-pandemic levels. He adds that “a spike in new business formation ($500K a month) will mean many small businesses will lack credit history for private funding. But, 260M card offers went out recently to consumers and they are richer than they used to be.”
Finally, fraudsters are refocusing on small businesses as government stimulus programs transition from short term pandemic view to longer term infrastructure support. Unfortunately, Brodie says that “ransomware is at an all-time high.”
Image: Brodie Oldham
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