How are small businesses feeling? It depends on whom you ask.
How are small businesses feeling? It depends on whom you ask.
There is some dueling data on the health and well-being of the small-business economy this week: The National Federation of Independent Business found small-business owners in a downbeat mood for the 25th straight month, with their outlook for sales and growth falling in January. American Express, on the other hand, reports small-business owners turning sharply more optimistic at the beginning of 2024, with 85% satisfied with their business success.
What gives?
For the glass half full approach, “small-business owners are feeling particularly optimistic and resilient in 2024,” said Brett Sussman with American Express, which surveyed several hundred businesses with 1 to 500 employees. “This is a far cry from this past summer, when 80% cited the economy impacting their long-term confidence.”
Sussman said problems like inflation and supply chains are abating.
“Fifty percent said they’re looking to proactively expand — new locations, products, services,” he said.
And the glass half empty?
“Small-business owners are still feeling the pressures of inflation and labor shortages,” said Holly Wade at the NFIB, which surveys its members — most with 40 or fewer employees — every month.
“January did show a dramatic drop in sales expectations in the next quarter,” she said. “And the challenges in which they’re having to operate take up a lot of resources and time. They’re particularly sour on that.”
Now these are different surveys. NFIB skews to smaller small businesses, and a lot of those firms are struggling, said Alex Shvarts at fintech firm FundKite.
“We process a lot of business-funding applications, and we’ve been seeing a lot of negative sentiment. It went from ‘How do I grow my business?’ to more like ‘How do I stay afloat?'”
Shvarts said macroeconomic conditions might improve later this year, but right now, his clients are still dealing with high prices, high interest rates and a lot of stress.
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