Each New Year Brings New Goals & Expectations
With each new year comes a new set of goals and expectations. That’s no different for the small business owners of the world who must constantly navigate the ups and downs of the local and national economies while working to sustain and grow, for their sakes and for the sakes of their employees. So we wanted to know: What are small businesses expecting to accomplish in 2017?
To help figure that out, we looked to the newest edition of the Wasp Barcode State of Small Business Report, which, for the third straight year, asks over 1,000 small business owners and executive leaders about their biggest challenges, successes, and plans—a review of all things small businesses concern themselves with, from marketing costs to economic optimism.
While the report runs the gamut, here are the questions and answers that tell us how small business owners are preparing for 2017.
Small business owners are generally optimistic about the economy and their own growth
For many small business owners, the economy is looking up, and has been for some time. In 2016, 44% of respondents said they felt at least “slightly better” about the economy compared to 12 months earlier. In 2017, that number dropped just two points to 42%. A third of those respondents said they felt “significantly better” about the economy.
There was a sizeable portion of businesses—28% in all—who had less confidence in the economy. Interestingly, it was the biggest businesses of those polled (companies that had 101-499 employees) that felt most strongly about the economy either way: 47% said they felt better while 31% felt worse, with just 22% feeling neutral.
The economy as a whole is one thing: What did businesses anticipate their own, individual growth would be this year? As usual, respondents were even more positive about their own outlook: In all, 69% expected an increase in revenue over 2016. It broke down like this:
● 31% expected a 1 to 4% increase
● 26% expected a 5 to 10% increase
● 12% expected an 11+% increase
● 10% expected a decline in revenue
● 15% expected no change
Additionally, more than half of respondents said they planned to hire new employees in the coming year, while only 4% said they planned to reduce their staff. Generally, we see optimism and positive trends in the minds of small business owners on this front.
Hiring new employees and increasing profit tops the list of 2017’s biggest challenges
Of course, it wouldn’t be a small business enterprise if there weren’t some challenges met along the way. The report also asked respondents to discuss the top challenges facing their business this year. At least a third of respondents (who could choose the biggest three challenges) cited the following:
● Hiring new employees (50%)
● Increasing profit (46%)
● Employee healthcare (44%)
● Growing revenue (39%)
● Cash flow (34%)
The rest of the list includes government regulations, adding or launching new products, outdated infrastructure and more.
Most of these concerns are fairly standard: Which business owner throughout history wasn’t concerned with increasing their profits or maintaining a steady cash flow? While there were few statistically significant changes from the year prior, there was a notable uptick in concerns about government regulations (up 4%) and decreases in both growing revenue and raising capital. After a tumultuous political campaign season, perhaps there are some concerns about the role government may come to play in the world of small business.
The IT & software outlook remains remarkably similar to 2016
Arguably the biggest area for growth, change, and increased investment over the next few years will be in IT and software implementation, as the business world becomes increasingly digital and tech-savvy. That view is reflected in the 2017 outlook on IT and software spending, which is similar to what we saw in 2016.
Here’s how the respondents broke down their expected IT spending change in 2017:
● 42% anticipate an increase, with about half that number expecting a modest increase of 1-5% over last year.
● 16% anticipate a decrease, with 7% saying they expected to spend at least 5% less compared to last year.
● 32% anticipate no change.
These numbers are virtually identical to the report from the year prior. The same goes for when respondents were asked whether they plan to add web-based or subscription software this year: A little less than half the respondents said yes; 22% said no.
There are other areas where businesses might expect to make internal investments in the near future. Far less than a majority of respondents said they used automated systems to track their inventory and/or fixed assets, like computers, tablets, or vehicles. And social media marketing has been steadily on the rise for years—more businesses may end up outsourcing this task, or asking their employees to help create a company-wide social media campaign to aid in getting the word out about products or services.
What about the new presidential administration?
We’d be remiss if we didn’t note that the national conversation has been all about presidential politics the last few months, and that Donald Trump has caused both excitement and concern in equal parts since his election. Approximately 49% of respondents expected a positive impact on business by the new president, and 20% expected a negative impact.
Like the markets and the economies of other nations, many business owners are still unsure of what the new president will usher in. There is still plenty of time for him to make an impact either way.
The takeaway: Things are trending up for 2017
Overall, we can see that many small business owners are looking forward to growth, revenue increases and internal improvements in 2017. An up and down 2016 makes way for a new beginning, and the tens of millions of small business owners who depend on both their entrepreneurial spirit and the active spending habits of consumers appear to be ready to embrace it.
Image from Dusit/Shutterstock