By Steve Noe
Although small business optimism in the second quarter of 2017 was down slightly over the first quarter of the year, the good news is that it still remained relatively high, according to the latest findings from the Wells Fargo/Gallup Small Business Index that was conducted April 3-7.
In the quarterly survey that measures the optimism of small business owners, the overall Index score was 95 in April versus 100 in February when small business owners reported their most optimism since the start of the Great Recession. Wells Fargo noted that the 5-point drop from the first to the second quarter wasn’t “statistically significant,” and small business optimism is still up significantly from a year ago when the Index was 64.
Wells Fargo noted that little changed in many of the key metrics from the first to the second quarter. Those metrics included:
- Strong financial situation: Of those surveyed in April, 73 percent said their current financial situation is very or somewhat good versus 71 percent in February.
- Healthy revenues: In April, 46 percent said the revenue of their business increased a little or a lot over the past 12 months versus 45 percent in February.
- Steady cash flow: In April, 63 percent said that their cash flow was very or somewhat good over the past 12 months versus 64 percent in February.
- Access to credit: In April, 39 percent said that credit was somewhat or easy to obtain over the past 12 months versus 40 percent in February.
“It’s encouraging to see that for many small business owners 2017 is off to a great start, and they remain optimistic and continue to express confidence in the outlook for their businesses,” said Lisa Stevens, Wells Fargo head of small business. “Our latest survey shows us that more small business owners report plans to hire more employees, increase their capital spending, and apply for new credit products in the year ahead. This is consistent with what our bankers are hearing from small business customers today. As the economy has improved over several years, more and more business owners have healthier finances and are ready to take steps to position their businesses for the long term.”
When small business owners were asked about their hiring plans in the April survey, 31 percent said they expected the number of jobs or positions at their company to increase during the next year, but 52 percent said finding qualified people to apply for jobs at their businesses was a top challenge. Other hiring challenges included: difficulty knowing how well an applicant would do when hired (43 percent); candidates applying for jobs being either over or under qualified (32 percent); and not having the time and resources to devote to finding the best candidates (32 percent).
In addition, when small business owners were asked to identify the most important challenges currently facing their business, the biggest challenge was attracting customers and finding new business at 13 percent, followed closely by hiring and retaining quality staff (11 percent), the economy (10 percent), and government regulations (9 percent).
How has your business fared in the first half of 2017, and how optimistic are you about the rest of the year? What are your biggest challenges, and how do you plan to address them? Please share your responses to these questions and any additional thoughts on OPE’s Facebook page (www.facebook.com/OutdoorPowerEquipmentMag). I hope to hear that your 2017 is off to a great start and that you’re optimistic about the rest of the year!
OPE Senior Editor Steve Noe