The FINANCIAL -- Optimism among small business owners is on the rise, according to the 2017 American Express OPEN Small Business Monitor.
The annual survey found that nearly three quarters of business owners have a positive outlook on the economy and their own business prospects over the next six months (72%, up from 64% 2016 and 67% 2015). This rosy outlook is translating into immediate plans for growth. Business owners have made growth their single most important priority, surpassing keeping/maintaining current business and sources of revenue for the first time since Spring 2011.
This year, business owners find themselves in a good position to expand. One-in-five entrepreneurs (20%) say that their business is “riding high” and growing strong in the current economy. Cash flow concerns are flat (34% vs. 36% a year ago) and business owners remain confident they can access the capital necessary to grow (82%, on par with 83% 2016).
As they shift into growth mode, entrepreneurs plan to make capital (56% vs. 51% 2016) and hiring investments (45% vs. 39% last year and 34% in 2015). They are also increasing their usage of social media tools (65% vs. 57% last year). The primary reason business owners are using social media is to attract new customers (52%).
“In this economy, there’s a clear correlation between business owner optimism and plans for growth,” said Susan Sobbott, President, Global Commercial Payments, American Express. As they look to grow, business owners plan to increase capital investments, hire staff and increase usage of low cost methods like social media to attract new customers.”
Staffing up with the Best Candidates Proves to be a Growth Challenge
According to the survey, entrepreneurs plan to invest in staff as a means to grow their businesses. Nearly three-quarters (74%) need to hire in order to handle growing business or to help increase business volume (72%). As they look to meet their staffing needs, the greatest number of small businesses (17%) will hire a combination of full and part time employees, 16% will hire only part timers and 12% will hire only full timers.
To set their business apart from the competition, 78% of entrepreneurs will place a heightened focus on better servicing their customers. Business owners are aware of the importance of having proficient employees. More than three-in-ten (31%) say their business mantra is “You are only as good as your people.” But securing the best employees is a concern. Finding the right staff continues to be the number one challenge to growth (26%, up from 19% last year).
Large Majority Attribute Happiness to Being an Entrepreneur; Continue to Take a Salary
Business owners’ optimistic outlook is not limited to business. A large majority of entrepreneurs (94%, on par with 95% in 2014) say they are happy with their lives. Of these, more than eight-in-ten (81% on par with 80% in 2014) say their happiness is due somewhat or entirely to being an entrepreneur.
Another bright spot is that the number of business owners who pay themselves a salary is holding steady year over year (55% vs. 51% last year). For those entrepreneurs who are taking a salary, they are paying themselves an average of $75,970 per year, basically unchanged from $76,010 last year.
Continuing on this positive trend, fewer entrepreneurs are worried about their ability to save for retirement (45%, down from 53% 2016). On average, they believe they will need $1,182,000, up slightly from the $1,170,000 they thought they needed last year.