How Optimistic Are Small Business Owners Heading Into the New Year?
If the final Metlife & U.S. Chamber of Commerce Small Business Index is any indication, 2020 could be an exciting year for small business owners.
For the uninitiated: Every quarter since Q2 2017, Metlife and the Chamber of Commerce has surveyed roughly 1,000 small business owners from across the country. It spans numerous industries, and covers all breeds of small businesses – from those with no employees to those with up to 500 workers.
The survey asks the same questions of small business owners every quarter, gauging things such as their views on the health of their companies, whether they’ve increased or decreased staff, expectations for their business for the new year, their thoughts about the U.S. economy, and more.
True, this small business index doesn’t have much history – it only started up in Q2 2017. But several measures reached new all-time highs, painting an optimistic picture for small business owners heading into 2020.
Let’s take a closer look at some of the most notable results.
Small Business Index Hits All-Time High
The brightest highlight of Q4 2019’s survey is an all-time high index reading of 71.3, up from the previous record of 70.7 set in Q3 2019. It also marks a notable change in position from the start of 2019, when the stock market’s scare to end 2018 drove a pessimistic reading from small business owners.
That result was driven by a few factors, including:
- The fourth consecutive improvement in the percentage of small businesses owners reporting good health (69%).
- An all-time-high 59% of owners calling their local economic outlook “good.”
- A strong percentage of owners (57%) expressing optimism in the U.S. economy.
Each of those results represents a strong vote of confidence, but perhaps more interesting (and useful) to small business owners are some of the more granular results from the survey. Here are a few highlights:
Cash Flow on Cruise Control: Of the 1,000 small business owners surveyed, 83% say they’re comfortable with their cash flow, which is tied for the highest level of optimism in the survey’s short history. (Remember: Cash flow is different than profits, and has much more to say about what your business can afford in the moment.)
Minority-Owned Businesses Ready to Expand: Minority-owned businesses are adopting more of an attack mode at the moment than non-minority-owned ones. Specifically, they’re more likely (34% to 25%) to plan for an increase in investments, and more likely to plan to hire more workers (36% to 27%).
Millennials Want to Add Headcount: Millennial small business owners were more than twice as likely than Baby Boomer owners, by a 51% to 25% margin, to have plans to grow their staff.
Small Businesses Are Sticking With Standard Tech: The Metlife and the U.S. Chamber of Commerce survey included a quarterly spotlight focused on tech. The most widely used technologies among small businesses included computer accounting systems (84%), data privacy software (53%) and social media management tools (52%), while cloud computing (46%), customer relationship management systems (28%) and big data analysis (15%) were less utilized.
If you’re content just keeping up with a few pieces of basic terminology and prefer to hand off accounting duties to the experts, talk to McManamon & Co. We’re an accounting, tax, fraud, forensic and consulting firm that specializes in small to midsize businesses, and we can help you with a wide range of accounting needs, from creating financial statements and maintaining records to eventually training your own accounting staff.
As your small business looks ahead to 2020, tap McManamon & Co. to help you unlock your company’s full potential in the new year. We provide a wide variety of services to small and midsize companies, such as accounting and tax services. But if 2020 is the year you plan to take your office paperless or make a transformative merger … well, we can help with that, too.
Give yourself a boost to start the new decade. Call us at 440.892.9088 or contact us online today.
Tags: McManamon, small business | Posted in accounting, McManamon & Co., small business