Small Business Weekly Forecast

Small Business Weekly Forecast

The small business forecast for this week is sunny and the storm clouds on the horizon aren’t getting any closer.  More small business data showing end-of-year revenues as a springboard into 2024 optimism are on our radar.  There is still negativity towards the national economy, citing high costs and difficulty hiring.  However, those clouds don’t seem to be moving any closer this week.

New Small Business Data

Intuit QuickBooks Black History Month Survey (February 1, 2024)

Summary: A survey of over 2,000 Black small business owners provides insight on the use of AI, hiring practices, IP protections, and economic value.

• 84% of Black-owned businesses innovated within their own operations in 2023, with the highest percentage (43%) innovating through new products or services, followed by new management processes (38%).
  

• 80% of Black-owned businesses own a trademark, copyright, or patent and 29% of those without IP protections are unfamiliar with the process.
  

• 84% of Black-owned businesses are using AI to help manage their businesses.  39% are using AI to help generate ideas or spark inspiration and 36% are using it to help with customer support.
  

• 17% of Black small business owners are worried about how AI will impact their privacy.  16% of Black small business owners worry that AI will replace jobs and 14% are worried about how AI impacts authenticity.  
  

• 70% of Black small business owners report they are the first in their family to own a business.
  

• 71% of Black-owned businesses hired employees last year and, on average, 49% of their employees are Black.
  

• 32% of Black small business owners say their most significant contribution is the money they bring into the economy and 16% cite jobs in their communities as most significant.  15% of Black small business owners say that wealth creation for Black individuals tops the significance rankings and  14% say that mentorship of other Black small businesses is the most significant. 
  

Goldman Sachs 10,000 Small Business Voices Survey (February 1, 2024)

Summary: Survey of 1,459 Goldman Sachs 10,000 Small Business participants reveals a bullish approach to 2024 despite high inflation, tight credit, and worker shortages.

• 75% of small business owners are optimistic about their business finances in 2024 and 62% expect profitability to increase.
  

• 28% of small business owners have a positive view of the national economy and 27% have a negative view, with 44% ranking the economy as “fair.”
  

• 71% of small business owners report that inflationary pressure on their business increased in the past 3-months and 33% rank last year as the toughest year to run their business since 2020.
  

• 40% of small business owners who applied for a loan or line of credit in the past 12-months received all the funding they requested and 86% of small business owners believe their growth will be stunted if credit tightens.
  

• 57% of small business owners expect to add staff this year and 81% are struggling to recruit good employees.
  

National Federation of Independent Business (NFIB) January Jobs Report (February 1, 2024)

Summary: Good news is that consumers continue to spend.  Bad news is that small businesses still struggle to find good employees.

• 39% of small businesses reported job openings they could not fill in January (1 point lower than December and still far above the 49-year average of 23%).
  

• 55% of small businesses hired or tried to hire in January (unchanged from December).  Of those hiring, 89% of owners reported few or no qualified job applicants (also unchanged from December).
  

• 15% of small business owners are planning to create new jobs in the next 3-months (down 1 point from December).
  

• 39% of businesses raised compensation in January (up 3 points from December) and 26% of small business owners plan on raising compensation in the next 3-months (down 3 points from December).
  

• 30% of small businesses have openings for skilled workers (down 3 points from December) and 15% have openings for unskilled labor (up 1 point from December).
  

WSJ / Vistage Small Business CEO Confidence Index (January 29, 2024)

Summary: Index hits highest point in 12-months and is infused with positivity except for the anxiety small employers are feeling over higher labor costs.

• 23% of small business owners say the economy has improved compared to 12-months ago (up 3 points from December) and 36% say that the economy has gotten worse over the past year (8 points less than December).
  

• 48% of small businesses plan on increasing employees in 2024 (down 9 points from December). 
  

• Hiring challenges impact the ability of 44% of small businesses to operate at full capacity (unchanged from December).
  

• 32% of small businesses expect to increase fixed investments in 2024 (down 1 point from December).
  

• 60% of small businesses are bullish about expected revenues in the next 12 months (down 2 points from December).  52% believe profitability will improve (up 3 points from December) and 15% believe that profitability will shrink (3 points lower than December).
  

• 59% of small businesses believe that wages will be the greatest source of inflation throughout 2024.
  

MetLife & U.S. Chamber of Commerce Small Business Index for Q4 (December 12, 2023)

Summary: Negativity towards the national economy continues, but confidence in small businesses’ own cash flow remains strong.

• Index dropped 8 points from Q3 to a level of 61.3, returning to levels of confidence from earlier this year and consistent with Q4 in 2022.
  

• A higher percentage of small businesses are negative about the U.S. economy (53%) (10 point increase from last quarter) and 25% are positive about economy’s overall health (8 point decrease).
  

• This is the eighth consecutive quarter where inflation ranks as small businesses’ top concern (50%) and the second biggest concern is revenue (22%).
  

• 42% of small businesses plan on increasing investment over the next 12-months (unchanged from the last 2 quarters) and 40% of small businesses plan on adding staff (unchanged from last quarter). The percentage of small businesses anticipating increased revenues remains elevated (65%) albeit 6 points lower than the last 2 quarters’ record highs.
  

• 64% of small businesses believe the health of their own businesses is good (2 point decrease from last quarter) and 67% are comfortable with their current cash flow (5 point decrease, but consistent with Q4 of 2022).
  

• 45% of small employers searched for new talent in 2023 and 60% of those employers said it was hard to keep up with salary expectations.

Written by Thomas M. Sullivan for the US Chamber of Commerce.