‘Small businesses are beginning to regain their footing’: Sharon Miller on small business outlook

Sharon Miller, Bank of America Head of Small Business, joins Yahoo Finance’s Adam Shapiro and Seana Smith to discuss the state of small business in the United States and the finding of Bank of America’s Small Business Owner report.

Video transcript

ADAM SHAPIRO: So the latest NFIB survey, and this is the voice of small business, actually fell-- this is about their optimis,-- fell 2/10 of a point to a reading of 99.6. That was from May. But that's after three straight months of increases. To help us understand what's happening on the front lines of the economy, especially with small businesses, because they're so crucial to employment and this economy, we invite into the stream Sharon Miller who's Bank of America Head of Small Business.

Good to have you here, Sharon. And also Bank of America, in its small business owner report, you found though that more than half, 60%, of small businesses expect their revenue to increase over the next 12 months. So help us understand what's actually happening on the front lines of small business.

SHARON MILLER: Well, small businesses are beginning to regain their footing. And you're right. We did see in our latest survey 60% of small businesses expect their revenues to increase over the next 12 months. When you compare that data to just six months ago, which was when our last study came out, that number was 34% So we have seen a significant uptick as vaccines get broadly disseminated and as there's more and more activity going on throughout the economy and in our local communities.

SEANA SMITH: Sharon, we've talked to a number of economists here on Yahoo Finance. They talk about the labor shortages. It's not only affecting the larger companies. Obviously, this is having an impact on small businesses as well. I'm curious what you're hearing on that front and how long you expect it to take until this potential-- or until this situation's potentially corrected?

SHARON MILLER: Well, our survey said that one in five business owners wanted to hire this year, over the next 12 months. So they want to grow their business. They want to expand their business. And what we also found were that 43% of small businesses tried to hire during the pandemic. And half of those couldn't find qualified talent. So you continue to see this is an issue. It was an issue before the pandemic.

And what has happened, this has just intensified that labor market and what we need to do to help small businesses. I mean, you see businesses open. You see the sign next to them saying, we're hiring. So it is an issue and continues to be.

ADAM SHAPIRO: Stagflation is the inappropriate word. But I can't think of another way to describe this. Because if you have an inability to hire people but yet, in the survey, you also found 62% anticipate operational changes made responding to the pandemic will continue beyond the pandemic, how do you make those permanent if you don't have the staff to do it?

SHARON MILLER: Well, during the pandemic, we did find that 62% of respondents said they had made operational changes to their business. And that comes in a variety of ways, from shortening hours to making sure you have proper sanitation at your business. And then the other piece about this is digital capabilities. We did find that 62% of our respondents said that the digital capabilities and online platforms that they built during the pandemic if they didn't have that available to them then for their clients they will continue to use that as they move forward with their business.

So I do think this shift to digital and what we're seeing in the economy, the ability for businesses, small or large, to distribute across a broader array of clients via online or digital is so, so important.

SEANA SMITH: Sharon, I know that the outlook continues to improve. 60%, like you said earlier, small businesses expect the revenue to increase over the next year. But when we take a look at so many businesses continuing to struggle, not being able to hire the workers that they need right now, do you think we'll see more businesses fail over the coming months until we're officially past the pandemic and the hardships that it brought?

SHARON MILLER: You know, we will. We will continue to see businesses go out of business and businesses innovate and come into business. I mean, any time you have this type of pandemic and the way that the economy has upheld during this, you have seen significant closures. You've also seen more closures in the Northeast. You know, I was just with clients in New York and New Jersey and having those discussions, where you see a lot of businesses, almost a third, have closed during the pandemic.

And then other areas of the country were hit in a different way. So I do feel we will continue to see that cyclical nature of businesses opening, businesses closing. But we will move through this. And that's what our data tells us. That's what we see with consumer spending. And our economists are expecting GDP growth this year of 7%. So the outlook is strong as we move through this pandemic.

ADAM SHAPIRO: Sharon Miller is Bank of America Head of Small Business. We appreciate your being--