Is a Promising Future Hidden Inside a Disappointing Small Biz Confidence Survey?
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 in the coming years: Millennials and women have an extremely positive attitude about the futures of their businesses.
Let me set the stage for this just a bit. First, Millennials have taken it on the chin in recent years. The stereotype of Millennials living in their parents’ basement has been the starting point for all kinds of jokes. Further, we know that women have historically had a more difficult time getting funding for their startups.
Yet today we see that these two often-maligned groups are displaying more confidence in the future than small business owners as a whole. Here are the results that show this:
- While only 36 percent of men business owners think their financial standing will be better in six months, 44 percent of women owners are looking forward to better finances.
- Almost three-fourths of Millennials (72 percent) say they will be in better financial shape in six months, compared to only 24 percent of owners over 50 years old.
Let’s hear it for the optimism Millennials and women are bringing to the table!
Frankly, I think this positive attitude we see in Millennials today is probably the single most important finding in the survey…at least in the long run. Sadly, our country was going through the worst recession in decades when a good share of Millennials hit the job market. It wasn’t their fault, but they probably suffered the consequences more than anyone. As newbies to the job market and career path, it’s easy to understand how discouraged they must have been.
It’s a fact that the future health of our economy – which is so heavily driven by small business – depends on Millennials taking their rightful position in commerce, and I think the Capital One Spark Business Barometer Survey shows that they are ready to take on that responsibility.
By the way, there are other indicators that Millennials are beginning to flex their financial muscle in the U.S. economy. Remember how we were 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, as I mentioned above.
It turns out that those observations are not quite so true. 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 that 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 be 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.