Is a Promising Future Hidden Inside a Small Biz Confidence Survey’s Disheartenting Results?
Editor’s Note: This post is sponsored by Capital One Spark. All the comments and opinions are my own.
One survey result is a data point. When you get a few consecutive survey results that are all pointed in the same direction it’s a trend – and unfortunately that’s what’s revealed in the results of Capital One’s latest Spark Business Barometer.
The survey, which has been giving a Small Business Confidence Score since at least 2009, showed a nine-point drop in the percentage of business owners who say conditions are either “good” or “excellent” compared to the same time last year. Further, the survey has shown an uninterrupted decline since the first quarter of 2014.
You can probably chalk up most of the uneasiness to factors such as the seemingly tenuous economic conditions, the unsettled political situation, and the heightened regulatory environment.
But if you have a little history in small business, you know that most owners tend to be optimists and even in challenging economic conditions many forge ahead and do quite well. We see these underlying truths in the Capital One survey results as well:
- 41 percent of small business owners say conditions are excellent or good, and
- 26 percent say they plan to hire within the next six months, and of those, about half say they will be hiring full-time employees.
But there are a couple of statistics buried in the survey results that I think are even more promising for U.S. small business and our overall economic health in the coming years: Younger small business owners and women have an extremely positive attitude about the futures of their businesses and seem to be doing some promising planning for the future.
Let’s first take a look at two telling examples: hiring plans and retirement planning. Younger groups of respondents reported more plans to hire in the next six months. Younger respondents also said they offered retirement plans at rates higher than older groups.
This is fascinating because it says that younger small business owners are planning to provide better for the American workforce both today – through increased hiring – and tomorrow, by providing retirement options for their employees!
Further, as women look to the near future, they have a more optimistic outlook than men: While only 36 percent of male business owners think their financial standing will be better in six months, 44 percent of women owners are looking forward to better finances.
Millennials have gotten a bad rap in the media of late. You may remember reading news stories over the last few years that Millennials weren’t buying things like previous generations? It was said that instead of buying cars, they were punching up Uber rides on their smart phones. Instead of buying houses they were living in their parents’ basements.
It turns out that those observations are not quite so true…at least any more. For example, the National Association of Realtors just published a report on generational trends for home buyers and sellers. It turns out that the largest generational group of buyers (at 35 percent) are 35 years old and younger, with a median age of 30 years old.
This is great news for our economy because there are 75.4 million Americans between the age of 18 and 34, compared to only 74.9 million Baby Boomers – and the Baby Boomer number is going down rapidly every day.
To pull this together, despite the recent downward trend in small business confidence, as reported by the Capital One Spark Business Barometer, there is a lot of evidence that our best days are ahead of us. And I should add one thing: If you’re a small business owner, find ways to tap into the Millennial market – it looks like they’re ready to start spending…big time.