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Data for today’s episode is provided by Mercator Advisory Group’s report – Small Business Mindsets and Banking Habits: Attitudes Matter.
Where do small businesses turn for advice?
- The top source of advice for small businesses – by a wide margin – is banks: 59%
- Accountants make a distant second place for small business advice, used by 43%
- 39% of small business owners turn to their employees for advice
- 9% of small business owners have and use a mentor for advice
- 20% of small business owners ask their friends and family for advice
- 13% of small business owners ask other small businesses for advice
- 32% of small business owners use a financial adviser for advice
Mercator Advisory Group’s most recent Primary Data report, Small Business Mindsets and Banking Habits: Attitudes Matter, based on the company’s annual Small Business PaymentsInsights survey conducted in spring 2019, reveals that 61% of small business are happy with the size of their business, yet 56% have active plans for growth. A majority (65%) also see the value in using social media as a business tool and see the value in cloud computing (62%). Further, 55% report that keeping up with new technology is “critical” to the success of their company.
When asked where they turn for advice in running their business, small businesses are most likely to report that they get advice from their bankers (59%) and their accountants (43%). Employees are a close third at 39%. Companies that have been in business the longest (10 or more years) are more likely to use multiple sources of advice than are newer companies. Along the same lines, larger companies are also more likely to get their advice from a number of different sources.
When asked about their primary financial institution, the vast majority of U.S. small businesses (85%) indicate they are satisfied with their primary institution’s dedication to small businesses. That said, a decrease in the use of the branch is apparent in this year’s survey. Last year 53% reported using their branch multiple times a year. In 2019 that number has fallen to 46%. This finding is supported by the decline in the use of tellers for depositing checks and cash (by 8 percentage points each).
Small Business Mindsets and Banking Habits: Attitudes Matter is the third of three reports summarizing the results of the 2019 Small Business PaymentsInsights survey, the fourth annual survey of small businesses fielded by Mercator Advisory Group. This was a web-based survey of 2,002 U.S. small businesses (between $100,000 and $10 million annual sales) regarding their use of payments and banking services.
“This year we added some new questions to address the attitudes small businesses have about technology, how they see their business, and who the get advice from. We felt that there was a need to get more insights into who the people who run small businesses are and how they think about their business. With regard to banking, satisfaction remains high, but the reported use of branches seems to be falling,” notes the author of this report, Peter Reville, Director, Primary Data Services at Mercator Advisory Group.
Companies mentioned in this research report are: Kabbage, Lending Club, OnDeck Capital, and Prosper.