J.D. Power Survey: Small Business Owners Seek Advice from Banks in Tough Economy

A recent survey by J.D. Power found that small business owners are feeling the strain from a weakening economy, and are looking for help from banks, but not just for loans and credit. Business owners also want business advice from banks, and that means banks have an opportunity to help them out in more ways than one.

According to the survey, half of small businesses throughout the country are currently classified as "financially unhealthy," and 76 percent of them are interested in receiving financial advice from their bank. A quarter of small businesses are categorized as "cash- or capital-constrained," and another 25 percent are considered "financially vulnerable." Significant factors influencing financial health are inflation (60 percent), supply chain disruptions (44 percent), and talent retention/acquisition (36 percent).

“Owners continue to show a dismal view about future sales growth and business conditions, but are still looking to hire new workers,” said Bill Dunkelberg, chief economist at the National Federation of Independent Business (NFIB). “Inflation, supply chain disruptions, and labor shortages continue to limit the ability of many small businesses to meet the demand for their products and services.”

The NFIB reported in a recent jobs report that 46 percent of small business owners reported job openings that were hard to fill, and of those hiring or trying to hire, 90 percent reported few or no qualified applicants for the positions they were trying to fill.

This is indicative of a larger trend that has been happening over the last decade plus:

Meanwhile, inflation is reportedly slowing a bit, but remains a major obstacle among consumers and businesses alike.

“Small business owners are staring down an increasingly ominous set of challenges that include everything from lingering supply chain issues to inflation to a talent scarcity, and they are looking to their banks for guidance on things like available credit, tips to reduce fees, and technology that can benefit their businesses,” said Paul McAdam, senior director of banking and payments intelligence at J.D. Power. “This scenario presents an enormous opportunity for banks to deliver comprehensive advice that takes into account a full understanding of the company’s business goals and shows real, committed partnership."

J.D. Power says the biggest factors influencing small business banking customer satisfaction are trust and people, and these are areas where bank relationship managers can help by explaining fee structures, resolving problems, and providing advice to small business customers.

Small business owners can utilize financial products provided by their bank, such as SBA loans, business lines of credit, etc. Banking professionals can also provide advice on key business components, such as cash flow management, fraud protection, payment technologies, and more to help small business owners meet today’s challenges with confidence and preparedness. Business owners are encouraged to reach out to their bank for guidance on any and all financial aspects of their operations.