American small businesses plan to finish 2018 with a bang, according to the fall 2018 Bank of America Business Advantage Small Business Owner Report. And they’re optimistic about the year ahead.
In the report, based on a semiannual survey of 1,000 small business owners across the country, 80% of entrepreneurs say they are confident that their 2018 year-end revenue will exceed that of 2017. And several business growth indicators are also up year-over-year, such as revenue expectations and expansion and hiring plans.
Projecting into 2019, 57% of business owners believe their revenue will increase (compared to 51% in fall 2017), 67% plan to expand (compared to 59% in fall 2017) and 27% plan to hire, compared to 16% in fall 2017. Significantly, 15% intend to apply for a loan, versus 8% in fall 2017.
Separately, according to the latest quarterly Wells Fargo/Gallup Small Business Index, optimism among small business owners increased substantially over the last quarter. The quarter, according to the index, received a score of 129, which is 11 points higher than last quarter’s score of 118, and apparently the highest in the survey’s 15 year history.
Small business owner survey respondents said positive business financials are largely the cause for their optimism. Eighty percent of respondents rated their financial situation as “very good” or “somewhat good,” while 84% said they expect their financial situation to be “very good” or “somewhat good” in the coming year. A record 55% of business owners reported increases in revenue, with 62% anticipating revenue increases in 2019. In addition, 74% said they had good cash flow in the past 12 months, and 78% said they expect their businesses to have good cash flow over the next year.
Small business owners are not without challenges. Hiring and staff retention issues were among the top concerns for small business owners, according to both reports. According to the Bank of America report, in 2018, turnover affected 24% of all small businesses, with 11% losing 10% or more of their workforce. For business owners who sought to hire new employees, 50% said the tightening labor market had a direct impact on their ability to find and hire qualified candidates. According to the Wells Fargo report, 18% of survey respondents said hiring and retaining staff was their top challenge.
December 7, 2018 | By: deBanked Staff