As coronavirus vaccines continue their rollout amid the prospect of greater economic and political stability in the months ahead, business leader sentiment is becoming clearer.
With the support of several industry-leading research and marketing agencies, LEAF recently completed a qualitative survey of more than 5,000 financial decision-makers regarding their outlook for business recovery. Here are a few key takeaways and insights:
LEAF Economic Recovery Survey
What Is Your Revenue Outlook for the Next Six Months?
Year End 2020
Scroll Down to View the Results of the Survey
What You Can Do:
2020 YEAR END SURVEY RESULTS
If you are selling equipment and technology, payments have never been more important.
Find sources of creative capital and protect your working capital relationships. You might even consider seeking innovative short term working capital alternatives to get plans moving and prepare for future revenues.
Put your 2021 plans in place now. Don’t wait on policy, virus news, or feelings of certainty. Put the capital to work, so you’re ready to catch a wave of growth from an economy starting to find its legs. Waiting too long might put you far behind competition.
Push for innovation that drives sales in a restricted economic climate.
Strategic Growth Plans
Maximize Revenue
Capital Planning
Wall Street and Main Street have sharply different outlooks as we head into 2021. Whether the market’s success is buoyed by virtually limitless central bank and government support or the universal discounting of near term valuations in favor of long term outlooks, there is an undeniable disconnect at play.
“We finished the year down around 18%. And that was pretty heroic. At the same time, the markets are soaring. I can’t help but feel there has been a shift in business activity to larger, publicly traded companies and away from the privately held small and mid-sized firms that power America. That might help explain why Wall Street sees a different economy than we do," said a principal of a northeastern manufacturer.
Others feel like the gap can lead us back to normal faster.
“Clearly, Wall Street is not reflective of our reality. Our largest supplier posted record profits this year, and we’re down 21%. But we believe that the government support of the markets and endless low-interest rates combined with a new stimulus can help us all hit the ground running in 2021," said a CFO of a national office technology firm.
Key Takeaways:
2020 is finally in the history books, and one financial matter has risen above all in the minds of business leaders – revenue.
What Are Your Largest Financial Concerns?
As business strategies push for revenue growth, financial leaders prepare for the cash flow challenges of up-front growth expenses.
“We’re going to have tighter cash flows and lower cash reserves than we’d prefer early in 2021. We have to grow revenue, and that involves investments in marketing, sales, and new products. But it’s not uncommon for those efforts to take 4-5 months before we see material revenues from the efforts,” said a CFO of a national manufacturer.
“The more vaccines I see on TV, the more optimistic we are," said a CEO of a national equipment seller.
“We MUST get those vaccines out there," said a CFO of a national services company.
“Stimulus is a must. And urgent. Sure, there are long-term inflationary and monetary concerns, but the house is on fire, and we’re arguing over the size of the water hose to use,” said a CEO of a regional equipment seller.
“Policy is a real concern. Higher minimum wage will hurt us. Higher taxes will hurt us. More regulation will hurt us. I’m excited to see demand explode in 2021, but very concerned over those financial benefits being eroded because of the policy direction,” said a CFO of a national services company.
Leaders continue to express concern, frustration, and even anger over the political climate. 8 of 10 survey respondents felt there were only two things that would keep 2021 from being a break out year: ineffective vaccines and government actions.
In six months, most business leaders expect to be back and better than ever.
How Long Will It Take Your Company to Recover to Pre-COVID Levels?
What do other business leaders think about economic recovery?
Key Takeaways:
Key Takeaways:
What are their biggest financial concerns?
Are we on the road to recovery?
What actions can you take to move beyond stability and recovery?
Liquidity
Cash Flow
Revenue
Expenses
Other
60
50
40
30
20
10
0
March
May
June
July
August
September
April
March
April
May
June
July
2,500
2,000
1,500
1,000
500
0
Already There or Better
3 Months
6 Months
Within a Year
Longer Than a Year
August
September
If your strength allows it, now may be a great time to act on geographic expansion, new services, or even an acquisition.
Expand
If you are selling equipment, lead more with payments. Get payments on your website. You should offer it, as they need it more than ever. Don’t make them work to find it.
Offer Payments
Seek finance alternatives that preserve cash and enhance cash flow. Payments help you manage limited budgets and scale the business predictably without breaking the bank.
Diversify Capital
What You Can Do:
If selling equipment, payments have never been more important as your customers may be limiting capital spending because of financial concerns.
Focus on Payments
If you are selling equipment, get your incentives, marketing efforts, and payment programs ready. The delayed CapEx investments are coming, and customer budgets may be limited. Think proactively with your finance program provider on how to solve that problem.
Embrace Transformation
What You Can Do:
Push for Innovation
Down >30%
Down 20-30%
Down 10-20%
Down 0-10%
Flat
Up 0-10%
Up 10-20%
2,000
1,400
1,000
200
0
March
April
May
June
July
400
600
800
1,200
1,600
1,800
August
September
“We’ve made the hard decisions, restructured our company, and secured a good liquidity position. 2021 is about revenue growth," said a CFO of an east coast distributor.
Click each month to highlight the month's data.
Reset table
Click each month to highlight the month's data.
Reset table
Reset table
Click each timeframe to highlight its data.
Recovery engines are firing up in American businesses. Are your plans ready, capitalized, and working to drive a stronger 2021?
Plan Ahead
October
October
October
November
November
November
Few things illustrate an unimaginable 2020 quite like the following data points:
• Over half of the businesses surveyed reported revenues were down 10-30%
• Nearly 20% of the businesses surveyed reported revenues were down 30% or more
• Less than 5% of the businesses surveyed reported increased revenues in 2020
• The U.S. Stock Market ended 2020 up 68% over this time frame reaching all-time highs
December
December
December
The sentiments of hope and optimism have returned. The vaccine offers a daily marker of our path back to better performance and a stronger economy. The certainty of policy direction helps business leaders put growth plans into action.
And now is the time for action. LEAF can help.
Whether it’s a near-term plan to stimulate sales or a creative way to put revenue-producing equipment to work now within budget, trust LEAF. We can help you think bigger, overcome obstacles, recover, and grow.