For the first time in five years, a majority of small business owners are optimistic about the economy, and business owners in regions of the country that last year were most concerned about the economy are now looking up, according to results of the 2014 US Bank Annual Small Business survey.
Now in its fifth year, the US Bank Annual Small Business Survey measured the opinions of more than 3,000 small business owners who shared their views on the state of the national and their local economy today, general business conditions and challenges, and their outlook for 2015.
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John Elmore, vice chairman for community banking and branch delivery at US Bank, said: "We’re pleased to see small business optimism at a five-year high. The survey results confirm what we’re hearing in the field. Business is strong, and while uncertainty remains and is dampening their plans to hire and expand, their outlook for 2015 is trending positive."
The Economy
In 2014, 56% of small business owners said they feel that the national economy is in a state of recovery or expansion, up significantly from 46% last year. In 2010, nearly nine out of 10 small business owners said the US economy was in a recession. This year that number reached a five-year low, with only 34% of respondents saying they believe the economy is still in a recession.
States or regions in which small business owners had the strongest rebound in sentiment about the US economy since last year include Arizona (14%), Southern California (15%), Washington (15%) and Missouri (12%).
Looking ahead to 2015, more small business owners are hopeful about the potential for economic growth. Fewer business owners think the economy will be in recession in 2015 (41%), and while fewer think the economy will be in recovery in 2015, significantly more believe the economy will be expanding in 2015 (16%) than those who believe it is expanding now (4%).
Business Conditions
More than two-thirds of business owners (70%) believe their business is in good financial health today, up from 64% five years ago. The percentage of those who report higher revenue continues to hover between 25%-30%, which has been the case since 2010. The percentage of business owners who said they expect revenue to be higher next year dropped significantly in 2013, and increased only slightly in 2014.
Those who say they plan to hire, make capital expenses or who have needed to seek financing for their business remains below 30%.
Top Issues Facing Small Businesses
Last year, with the fiscal cliff and government shutdown unfolding, more than one in five saw the federal budget deficit as the most important national issue. This year, only 14% of owners list it as their top concern, down 8% from 2013. While no single issue is top on the minds of owners, healthcare is now tied with the federal budget/deficit as the primary concern, followed by taxes.
Technology
Small business owners nationwide are ahead of the curve when it comes to technology. According to survey, they are more likely than the general population to define themselves as innovators and early adopters of new technology, and mobile capabilities are among the ways they are using it to get an edge.
Across the country, 75% of small business owners said they have integrated mobile technology into their business strategy, whether through mobile banking, social networking, web design, payments or other uses. Among them, business owners said that offering a mobile-friendly website added the most value for their business.
In addition to looking to new technology to position their businesses in the marketplace, 64% of small business owners maintain a social media presence to make connections, find talent or market their business. Those who maintain a presence said that Facebook was most effective, followed closely by LinkedIn.
