A blog post today from Sage today reveals the results of a recent survey of 700 small and medium-sized business about their confidence in the economy. Key amongst the findings:
Small businesses are optimistic
- In order to grow, 31% wil hire staff, 21% will invest in advertising and 34% will spend more on equipment and infrastructure
- Taxes, interest rates, and inflation were the three biggest issues keeping owners awake
Owners spend too much time on administrative tasks, with 70% indicating they spend 2 or more hours daily. They indicate that instead of administration they would like to spend time on
- Existing customers – 20%
- Marketing for new customers – 18.5%
- Developing new products – 17%
At Sage, our mission is to make the lives of business builders easier, so they can focus on what matters most – growing their business. We do this chiefly with our software, which makes managing everything from people to money as simple as messaging a friend on Facebook. But we also use our position as a global market leader to advocate for our customers on matters large and small that matter to them.
Here in the U.S., today’s business climate is full of uncertainty. Rapidly evolving technology and new regulations are changing the ways in which small businesses can innovate and grow. We wanted to understand how small business leaders are weathering these changes, so we asked some of our customers for their take.
Here’s what we learned, based on a survey of 675 small business owners and employees across the US.
1. Optimism and growth are in the air.
Small business owners are generally optimistic about the growth of their companies as 2017 progresses. Of the small business owners we heard from, companies within industries such as Construction and Skilled Trades/Contracting (11%), Manufacturing and Consumer Goods (8%), Technology (6%), Retail, Ecommerce and Wholesale (5%) were the most optimistic about their business prospects and pipeline in 2017.
But how exactly do these companies plan on growing? Over 31% of those surveyed expressed that they plan to hire new staff this year, with at least 12% of the businesses onboarding 10 or more new employees. 21% will invest in advertising and marketing efforts to spread their message and connect with new customers, and 34% are ready to invest in new equipment and infrastructure.
2. Keeping an eye and ear on the issues.
Small business owners must keep a close eye on major economic shifts and policy changes, as every cent matters in the fight to grow. Respondents believe that tax policy changes would have the greatest impact on their business this year (40%), followed by changing interest rates (26%) and inflation (17%).
When it comes to the issues and policies up for debate in Washington, almost 50% of respondents said that changes to wage law would have the greatest impact on their business this year, while 43% said that the cost of healthcare is the most important regulatory issue facing their business.
On the whole, 64% of small business owners responding said that the Trump administration is doing a good job of looking out for small business owners. Coincidentally, 64% of SMB owners responding also reported feeling positive about Trump’s tax reform plan and it’s impact on small businesses.
3. How will technology aid in the progress of small business growth?
As a technology company, we strive to help small businesses embrace tools that will not only make the days of their employees easier, but free up time to think strategically and creatively, both of which are imperative to growth and success. For us, this starts with educating these organizations on the evolving landscape of new technologies and demonstrating how and where they fit into employee workflows.
Some of our findings were quite exciting. For example, we discovered that 62% of small businesses are taking advantage of cloud technologies to manage their businesses. And amidst the buzz of AI and automation replacing jobs, small business owners aren’t worried about technology making their business redundant. Respondents in Professional Services, Construction and Skilled Trade, Manufacturing, and Financial Services for example felt the most secure.
But there’s room for improvement. 67% of small business owners spend two or more hours per day on administrative tasks, and while many of these tasks can be taken care of by advanced technologies such as chatbots, only 13% felt they could trust artificial intelligence to manage their administrative tasks. We see the need to continue educating on the role of admin-free technology, because when asked how small business owners would spend their newfound time if those hours of tasks were taken care of, 20% said they would provide products and services to existing customers, 18.5% would work on acquiring new customers and 17% would focus on developing new products and services.
However in the age of rising cybercrime and digital security, we’d like to help more small businesses understand the significance of keeping their digital identity and information secure. Only 43% of small business owners expressed a concern of their business being hacked; 23% were very concerned.
Of 250 SMB owners surveyed nationwide, business owners in the Southwest felt most positive about their business prospects in 2017, followed by:
Southwest: 25 VP + 31 FP = 56/250
Northeast: 14 VP + 38 FP = 52/250
West: 11 VP + 21 FP = 32/250
Of 250 SMB owners surveyed nationwide, business owners in the following industries were most optimistic about their business prospects in 2017:
Other professional services: 20 VP + 17 FP= 37/250 (15%)
Construction and Skilled Trades/Contracting: 18 VP + 10 FP=28/250 (11%)
Manufacturing – Consumer Goods/Industrial Goods: 15 VP + 6 FP = 21/250 (8%)
Technology Services + Products: 10 VP + 5 FP = 15/250 (6%)
Retail/Ecommerce/Wholesale: 9VP + 3 FP= 12/14 (5%)
2a. Of 250 SMB owners surveyed nationwide, business owners in these industries held the
most positive outlook for 2017:
Retail/Ecommerce/Wholesale: 12/14 total=86% of respondents in prof services felt positively about the outlook for their business in 2017.
Construction + skilled trades/contracting: 28/33 total = 85% of respondents in prof services felt positively about the outlook for their business in 2017.
Manufacturing: 21 positive/27 total=77% of respondents in manufacturing felt positively about the outlook for their business in 2017.
Technology services and products: 15 positive / 20 total= 75% of respondents in prof services felt positively about the outlook for their business in 2017.
Professional services: 37 Positive/57 total=65% of respondents in prof services felt positively about the outlook for their business in 2017.
Do you plan to make any capital investments in your business in 2017?
1 Hiring new staff 215 31.71%
2 Buying new equipment 232 34.22%
3 Investing in advertising/marketing 148 21.83%
4 Launching a new product 61 9.00%
5 Other 22 3.24%
How many people does your business plan to hire in 2017?
1 40 20.30%
2 to 5 114 57.87%
5 to 10 19 9.64%
More than 10 24 12.18%
Which of the following economic factors have the greatest impact on your business?
Please rank in order of impact, with 1 having the greatest impact and 6 having the least impact?
1. Interest Rates 98
2. Tax policy changes 148
3. Inflation 64
4. Currency exchange rates 8
5. Changes to tax policy abroad 11
6. Other 45
Which of the following costs have the greatest impact on your business?
Change in property price 14.21%
Cost of living 29.23%
Wage rates 48.91%
What do you believe are the most important regulatory
issues facing small business owners?
1 Minimum wage 16.40%
2. Taxes 31.72%
3. Cost of healthcare 43.28%
4. Immigration 2.96%
5. Deregulation 3.49%
6. Other 2.15%
Which of the following, if any, do you think will create the biggest challenge for your business in 2017?
Domestic competition 14.29%
International competition 2.96%
New regulations/policies 10.51%
Hiring the right people 18.78%
Finding enough time to prioritize the business 10.51%
Dependence on technology (ie internet outages) 10.42%
Access to capital and funding 4.94%
Access to international markets 0.90%
Lack of business infrastructure i.e. broadband/telecoms 1.71%
Lack of relevant skills 4.31%
Tax rates/tax relief for business 6.92%
Too much government bureaucracy and legislation 8.54%
US currency/exchange rate 0.72%
Changes to global tourism 0.18%
ALONG PARTY LINES
57% of SMB owners who voted in the 2016 Presidential election reported having a more positive outlook on the economy since Donald Trump took office.
93% of SMB owners who voted for Donald Trump reported having a more positive outlook on the economy since Trump took office.
71% of SMB owners who voted for Hillary Clinton reported having a less positive outlook on the economy since Trump took office.
64% of SMB owners responding believe that the Trump administration is doing a good job looking out for small business owners; 36% believe it is not.
64% of SMB owners responding reported feeling positive about Trump’s tax reform plan.
96% of SMB owners responding who voted for Trump said they believe the president is doing a good job looking out for small business.
1.5% of respondents who voted for Clinton said they believe the President is doing a good job looking out for small business.
54% of people who voted for Trump reported feeling more confident in their business prospects in 2017 in comparison to 2016 (97/180). 41% of people who voted for Clinton reported feeling more confident in their business prospects in 2017 compared to 2016 (35/86).
Only 62% of small businesses surveyed are taking advantage of cloud technologies to manage their businesses.
SMB owners surveyed aren’t worried about technology making their business redundant. SMB owners in Professional services, Construction and Skilled Trade, Manufacturing, and Financial Services felt the most secure.
43% of SMB owners are concerned about their business being hacked; 23% are very concerned.
AN ADMIN FREE WORLD
67% of SMB owners spend two or more hours per day on administrative tasks, but only 13% felt they could trust artificial intelligence to manage their administrative tasks.
54% of women spend over half the work day (4+ hours) on admin tasks
38% of men spend over half the work day (4+ hrs) on admin tasks
If you could spend less time doing administrative tasks, how would you spend the newfound time?
Providing products and services to my existing customers (20%)
Acquiring new customers (18.5%)
Developing new products and services / business innovation (17%%)
37% of female business owners spend more than 3 hours per day on admin tasks, but only 12.7% of female business owners said they would trust AI to help with administrative tasks: 7/55 respondents
29% of male business owners spend more than 3 hours per day on admin tasks
15.5% of male business owners said they would trust AI to help with administrative tasks: 19/122 respondents