Owners most concerned about getting new business and the economy
PRINCETON, NJ — U.S. small-business owners are slightly more negative than positive as they look ahead to the new year. Twenty-eight percent say they are less optimistic about their business’ future going into 2014 than they were going into 2013, while 23% say they are more optimistic. The rest say their optimism is about the same.
These results come from the fourth-quarter update of the Wells Fargo/Gallup Small Business Index, based on telephone interviews conducted Oct. 23-29 with 605 small-business owners. Optimism about 2014 is broadly similar to attitudes about the coming year when small-business owners were last asked the same question in the fourth quarter of 2011, although the gap between those who are more and less optimistic has decreased.
Small-business owners’ attitudes about the operating environment for their business in 2014 are similarly mixed, with about a quarter anticipating it will be worse and another quarter expecting it to be better. The percentage of owners who say the next year will be better in this regard is up six percentage points from the fourth quarter of 2011.
Small-Business Owners’ Concerns Split Between Government, Business Factors
Small-business owners were asked to name the most important challenge they face today. Their responses fall into two broad categories — those that represent external forces largely out of the owner’s control, and internal business factors that the owner more directly controls.
The most frequently mentioned external challenges include the direction of the economy, the potential effect of healthcare policy and Obamacare, the government in general, government regulation, and taxes. About half of small-business owners see one of these issues as their biggest challenge at this point.
About as many small-business owners mention more traditional business factors as their biggest challenges. These basic challenges include attracting new customers and business, cash flow concerns, costs and fees associated with running a business, hiring and keeping competent staff, the competition, and getting credit.
Although there are some generally positive economic signs going into the new year, including the rise in the stock market and the general uptick in consumer confidence, small-business owners evince mixed feelings about what 2014 will bring. Slightly more say they are less optimistic than more optimistic now than they were headed into 2013. Their views on the operating environment for their small business in 2014 are similarly divided — although slightly more positive than two years ago.
Some of small-business owners’ lack of optimism may be borne out of their concern about factors over which they have little direct control, including the economy, the government, and the implications of the rollout of the new healthcare law. Other concerns are more direct, including basic issues that are part of their competitive environment such as their ability to attract new customers and to find and retain good employees.