RALEIGH, N.C. — Small business owners have indicated a renewed sense of confidence for growth in their businesses during the year ahead despite the ongoing global pandemic, according to a new survey.
The seventh annual First Citizens Bank Small Business Forecast found nearly 80% of respondents polled are confident or very confident in business growth over the next 12 months, which is a 9% increase since September 2020 and a return to pre-pandemic levels.
Of the states in which the survey was conducted, California had the highest increase in business growth confidence — a 19% increase over the last six months with 84% of respondents expecting a strong year ahead.
Forty percent cited COVID-19 as a top concern impacting their ability to meet their business goals this year, which is an 11% decrease from just six months ago, and 25% of business owners stated that COVID-19 increased demand for certain products/services.
“The small business community continues to show us its resiliency and flexibility to adapt to today’s realities without letting the challenges steal their optimism for a brighter future,” said Doug Sprecher, director of sales strategy at First Citizens Bank.
“This study indicates that small business owners are continuing to be resourceful to not only stabilize but also grow their businesses in the months and years ahead. For 123 years, First Citizens has been on the side — and by the side — of small business owners. We’ll continue to use this data to educate and arm them on the opportunities that exist for strong business performance, while helping them plan and address any challenges today’s market produces.”
The survey also found economic sentiments for this year and beyond are on the rise. Of those polled, 61% of respondents are confident or very confident about the economic conditions over the next year, which is a 4% increase from six months ago. California small business owners showed the greatest increase in the outlook for near-term economic conditions with 71% indicating they are confident or very confident about the economy in the year ahead. This is a 22% increase from September 2020.
As it relates to long-term economic recovery, two-thirds of respondents stated they are optimistic or very optimistic about the economic conditions in the next two to three years. Once again, California showed the strongest gains in the long-term economic outlook with 74% (up 17% from September 2020) expressing optimism in the years ahead. Florida saw the sharpest decline in long-term economic optimism with just 54% (down 17% from September 2020) stating they were optimistic or very optimistic about the economy in that timeframe.
Other key findings
- Of factors impacting business owners’ abilities to meet their goals in 2021, 35% said the new presidential administration was a top concern. Other factors included unpredictable market conditions (32%) and the impact of climate change (21%).
- Overall, business owners’ perceptions of being successful or very successful in the last six months declined from 71% in September 2020 to 61% in 2021. Florida (28%), Wisconsin (23%) and California (21%) showed the sharpest decline in perceived business performance with a difference of 28%, 23% and 21%, respectively.
- With 40% of business owners indicating they plan to secure funding in the next year, banks continue to lead the funding considerations at 49%. Business credit cards (40%) is a close second for funding considerations.
- Top growth strategies for the year ahead include adding new products/services (47%), increasing advertising or marketing budgets (43%), hiring more employees (40%), and increasing or upgrading current facilities/equipment (26%).
- Local loyalty continues to drive positive sentiment with 72% of all respondents in all five markets agreeing that the state where their business is located is a great place to start a small business. By state, the percentage of respondents agreeing their state is a great place to start a business is: California (62%), Wisconsin (74%), North Carolina (75%), South Carolina (76%) and Florida (77%)
The First Citizens Bank Small Business Forecast is conducted annually in California, Florida, Wisconsin, South Carolina and North Carolina to assess the motivations, sentiments and success of small business owners in the United States. For more information on the survey and its results, visit firstcitizens.com/smallbizsurvey.