3 things all small business owners should be considering right now
Each quarter, we send a survey to small business owners to gain their insights and opinions on the issues that affect them and their businesses. Here’s what they told us recently about their confidence level in the US economy, their industry, and their business.
Confidence in the US economy is split
Half of the small business owners that responded to our survey indicated they are not confident about the future of the US economy. To further break down the level of confidence, 27% said they are unconfident, 11% are very unconfident, and 13% are extremely unconfident.
Twenty percent of respondents said they are neutral – they are neither unconfident nor confident. Thirty percent indicated confidence, with 20% saying they are confident, 8% saying they’re very confident, and 2% indicating they are extremely confident in the state of the economy at this time.
The factors impacting confidence are varied
We asked, “What factor(s) impact your confidence level in the state of the economy?” and respondents had a lot to say. Overarching themes were the geopolitical situation (war in Ukraine), inflation and the economy, and supply chain issues.
The most common answers are shown in the word cloud below, where the size of the word indicates how frequently it was mentioned.
Here’s what some of our respondents had to say:
“I've learned from living through the covid pandemic that the people in power prioritize the national and global economy over, say, public health. I don't expect that to change, so I'm not too worried about the overall state of the economy.”
“While inflation is an issue people are still spending and for my industry meetings are coming back with a vengeance.”
“I feel like the general public responds more to headlines and I've seen the headlines talking about recession. That seems to start the general public feeling nervous.”
“All will be well.”
“I think we're at an inflection point where the balance of power is finally shifting from corporations to workers, and that is going to require some important changes that positively impact our economy. Also, if the current administration can pass universal childcare, that would be a huge boost to the economy.”
“High inflation and the war in Ukraine add significant uncertainty to the future state of the economy.”
“I'm old enough to have seen the economy be relatively stable even though there are ups and downs.
The underlying fundamentals are sound. Short-term hurdles will work out.”
“Inflation rates coupled with supply shortages are pushing costs higher than expected across all segments of the economy.”
“Jobs reports are very good.”
Confidence about their own industry is higher
Despite concerns about the overall economy, small business owners are confident about the future of the industry they operate in. Nearly three in four (71%) of respondents said they are confident (35%), very confident (24%) or extremely confident (13%) in the future of their respective industries. Fourteen percent said they are neither confident nor unconfident.
Of the 15% who said they are not confident to some degree, 10% are unconfident, 3% are very unconfident and 1% are extremely unconfident.
Business owners are confident in themselves
The confidence expressed by respondents in their own businesses is close to the confidence they have for their industries. The same percentage (71%) expressed confidence in their own business, with 41% saying they are confident, 22% saying they are very confident, and 9% saying they are extremely confident.
Fifteen percent of respondents said they are neither confident nor unconfident in the state of their business. Eight percent described themselves as unconfident, 6% as very unconfident and 2% as extremely unconfident.
We asked, “What is the biggest change you’ve seen in your business in the past year?” Here were some of the most common responses:
Some business owners are facing challenges due to increasing prices, supply chain issues and a tight labor market. Others are busier than ever. Respondents commented:
“No substantial change, really. We've continued operating as we did the previous year.”
“People being excited to get together for in-person meetings.”
“Really, no change. Some slowdowns, but nothing really unusual - some projects finished, others haven't started yet.”
“I've been very fortunate to have continued success with getting and retaining clients.”
“More people still working from home results in more residential repair work.”
“Many buyers of real estate who were once qualified to purchase are being priced out by limited supply and rising interest rates.”
“Mostly internal - as I get better at things like marketing and processes, I'm closing more clients and getting better at delivery.”
“COVID has made me busier with more remote work.”
“Labor market is tightening, which is good for me because I provide niche services.”
“The only real change I can think of is that customers are more comfortable with seeking services without having a personal, face to face, in office meeting.”
“There is still uncertainty about consumers in my industry. This is changing, though, as more things return to "normal". Finding qualified employees or contractors has been difficult, given the demand for relevant skills.”
Most business owners are neutral on hiring
When asked how confident business owners are in their ability to hire appropriate employees for their business, more than two in five (41%) said they are neither unconfident nor confident. Twenty-nine percent expressed that they are unconfident to some degree, with 17% saying they are unconfident, while 6% are very unconfident and 5% are extremely unconfident. The exact same percentage (29%) said they are confident to some degree, with 21% saying they’re confident, 6% saying they’re very confident and 2% saying they’re extremely confident.
That’s the pulse of small business owners currently on the US economy, their industry, and their own businesses. The data gives an interesting look at how small business owners are handling the state of things and managing their businesses accordingly.
For this survey, 170 small business owners (with 50 or fewer employees) responded to an email survey sent between April 22 and May 8, 2022.