Though economic uncertainty and recession fears are at hand, a new survey reveals small business owners this year anticipate higher revenue and are ready to expand.
Some 65% expect revenue increases over the next 12 months. And 48% plan to expand their businesses, and 82% aim to secure financing, both higher than anticipated last spring. The optimistic outlook is from the 2023 Small Business Owner Report from Bank of America, the nation’s second-largest bank.
The report is based on an online survey of 1,145 U.S. small business owners with annual revenue of between $100,000 to nearly $5 million. Further, about 250 small business owners were surveyed in the 10 target markets, including Atlanta, Chicago, Houston, Los Angeles, and New York.
However, the news was not all peachy. Confidence in the national economy is persistently low, with just 34% of business owners expecting it to improve in the next 12 months. And economic factors, including commodities prices and interest rates, are among the worries for business owners.
Concerns like inflation and supply chain disruptions linger. Consider 80% of business owners raised prices in the last 12 months, possibly to help counter the impact. And roughly 75% of entrepreneurs see a potential economic recession this year.
Contrarily, 76% of small businesses are convinced they are equipped to survive a recession, and many plan to re-evaluate their business plans to adapt to the current economic conditions.
Wrestling with labor shortages and a competitive job market, business owners are stepping up actions to help boost retention. Over the past 12 months, 53% added more benefits and perks to existing pay packages, including remote/hybrid work (34%), cost-of-living bonuses (34%), and more vacation time (33%).
Sharon Miller, president of Small Business and Head of Specialty Banking and Lending at Bank of America, shared insights on the findings: “Our new Small Business Owner Report underscores the tenacity of small business owners, as many expect revenue increases and half plan to expand their operations over the next 12 months. Despite economic uncertainty, Black business owners have responded by being flexible and growth-oriented amidst today’s challenging small business landscape.”
Miller continued, “Innovation is driving expansion for business owners. Four-in-five entrepreneurs digitally optimized their business in the past year, with tactics including bolstering their social presence, implementing digital-first marketing strategies, and establishing online sales processes helping nearly half of these business owners reach new customers.”
Simultaneously, obtaining financing to help start or grow businesses remains an ongoing problem for many establishments, especially small Black-owned businesses.
A recent report disclosed 47% of Black small business owners predicted that the success of their business would be conditional on their ability to secure funding and grow their customer base.