- More than 1,300 American small business owners were polled in the semiannual Bank of America Small Business Owner Snapshot.
- Among those polled, 82% expect this year's revenue to be higher than it was in 2018.
- 91% of entrepreneurs polled said next year's election will be the top issue affecting their stance on the economy, along with the political climate and GDP growth.
As the year winds down, new data suggests American small business owners are optimistic about the final quarter of 2019 and beyond. The findings mark a feeling of positivity surrounding local economies, as well as a slight wavering in optimism at the national level.
Conducted by Ipsos Public Affairs between July 19 and August 19, the Bank of America Small Business Owner Snapshot polled 1,323 small business owners about 2019 and their expectations for 2020. Researchers focused on small businesses that make between $100,000 and $4.9 million annually and have between two and 99 employees, with the hope that the resulting data would be indicative of a wide range of businesses. To get a national view, researchers polled approximately 300 small business owners in Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York, San Francisco and Washington, D.C.
Sharon Miller, the head of small business at Bank of America, said the semiannual poll was intended to examine "the perspectives, aspirations and concerns of entrepreneurs around the country."
"This fall's report finds business owners poised to end 2019 on a high note," she said. "Business growth indicators remain strong and steady from last fall, and entrepreneurs are confident this holiday season, with a strong majority anticipating higher revenue than in 2018." [Read related article: Forecasts Suggest Consumers Will Spend More This Holiday Season]
The politics of small business
Whether you've been glued to the headlines or willfully ignoring the machinations of Washington, it's impossible to conduct business as an entrepreneur and not understand that politics have a direct impact on your bottom line.
In fact, when asked to identify the top five factors shaping their national economic projections, 91% said the 2020 elections mattered the most, with the American political climate coming close behind at 90%. Other major issues that small business owners expected to impact their economic stance included the GDP growth rate (89%), inflation (89%) and interest rates (89%).
Researchers asked about the other issues that weighed on small business owners' minds. What they found was a majority of those polled were concerned about healthcare costs (61%), consumer spending (54%), the strength of the dollar (50%), corporate tax rates (45%) and commodities prices (43%). The thing that worried small business owners the least was climate change (34%).
Ongoing trade issues also concerned those polled, according to the survey. As President Donald Trump continues to levy tariffs against countries like China, Brazil and Argentina for alleged currency manipulation, 44% said their businesses have been directly impacted by those policies. Among those who said they were impacted, 19% said they had a negative impact, 16% said they had a mixed impact, and only 9% said the tariffs helped their business.
While Trump has said that tariffs were ultimately going to help the American economy, 61% of those polled said the costs of goods and supplies have gone up, 55% said customer pricing has gone up and 39% said their relationships with vendors have become "challenged."
Year-end optimism for small businesses
As a small business owner, you naturally hope to achieve an increase in revenue from one year to the next. Researchers found that when asked about how they expected 2019 to end, 82% of those polled said they expected this year's revenue tally to show an increase over 2018.
Researchers also found that when asked about their plans for the next 12 months, entrepreneurs were similarly optimistic. According to the data, 69% said they planned to expand their business, marking a 2% upswing from data in the spring. Similarly, 58% said they expected their revenue to continue increasing next year and into 2021, though this figure shows a 1% decrease from expectations in spring.
As for their economic outlook over the next year, 52% said their local economy will improve while 49% said the national economy will also improve. In both instances, however, those only showed a 1% increase over data collected in spring.
With the holidays looming ever closer, 66% of entrepreneurs polled said their businesses will face challenges. Among those respondents, 42% said they'd face difficulty balancing work and personal commitments, 37% said creating customer demand would be difficult, and 36% said they'd have a hard time keeping prices competitive. To cope with the stress that 54% said they'd feel during the holiday season, 48% said they'd take "extra steps toward self-care," 38% said they'd go on vacation, and 25% said they would try to streamline their processes to help make the increased intake of business more efficient. [Read related article: The Best Days for Holiday Sales: A Guide for Businesses]
Looking forward to the next decade as this one comes to a close, 80% said they planned on growing or advancing their business in some way. The top three goals for businesses in the next 10 years was to significantly increase revenue (47%), prioritize their business's online and social media presence (28%), and expand into new markets (23%).