Small business owners are feeling good about sales, the economy and future conditions, with women- and millennial-owned businesses reporting significant increases in sentiment and expectations for the future. Capital One’s latest Small Business Growth Index found 50% of small business owners (SBOs) overall feel current business conditions are good or excellent (up from 41% a year ago), and the same percentage expect to see conditions improve in the next six months – the highest level reported since spring 2012.
“It’s encouraging to see more small businesses feeling optimistic about their performance and future prospects, particularly women and younger business owners who represent increasingly significant segments impacting our local and national economies,” said Buck Stinson, head of small business card at Capital One. “At Spark Business, we’re committed to understanding the opportunities and challenges impacting small businesses across the board, so we can build solutions that enable growth and success.”
Meanwhile, despite the increased optimism, the survey showed many businesses appear hesitant to invest in people, technology and marketing that may fuel business growth, with a majority of SBOs reporting they have no plans to hire (67%), increase marketing (66%), or invest in new technologies such as mobile payments (62%) in the coming six to twelve months.
Following are key themes revealed by the Spring 2017 Small Business Growth Index. Additional data and insights, including historical, demographic and regional comparisons, can be found here.
Business owners are feeling good and expect conditions to continue improving in 2017.
- Fifty-percent of all SBOs report their financial position is about the same as a year ago and 50% also expect to be in a better position six months from now; meanwhile only four% expect to be in a worse position in six months – the lowest reported percentage since fall 2012.
- Women and millennials are driving optimism, with 47% of women saying they’ll be in a better financial position six months from now (up 13 points from fall 2016) and 73% of millennials expecting better conditions (compared to Gen X at 53%, and Baby Boomers at 49%).
- SBOs in the Northeast and South are considerably more optimistic, with 57% of SBOs in those regions expecting improved conditions, compared to the Midwest (45%) and West (42%).
Despite the optimism, most SBOs are still hesitant to invest in the near-term.
- Only 27% of SBOs plan to add more employees in the next six months (compared to 26% one year ago) with nearly two-thirds (63%) of those hires being full-time associates vs. part-time or contractors.
- Top factors SBOs believe may impact business include: taxes (50%), managing cash flow (32%), keeping up with technology (30%), minimum wage increases (22%), access to capital (16%) and immigration reform (9%).
Businesses that use data analytics and mobile payments are more likely to have increased sales.
- Nearly half (46%) of SBOs who currently offer mobile payments say sales have increased over the past six months, compared to 35% who do not use mobile payments.
- Similarly, 44% of SBOs who use data analytics tools report increased sales, compared to 33% who do not.
(Source: Spark Business)