An old saying has it that people vote with their feet.
If recently released research is any indication, small business owners, entrepreneurs, and other like-minded businesspeople can expect a stampede in the new year – particularly if they follow the lead of their colleagues as well as their competitors.
New research from Kabbage, Inc., an online provider of small business loans, shows that small business optimism is at a three-year high. Ninety-five percent of business owners taking part in the survey said they expected increased revenue in 2015.
On an even more optimistic note, half of all businesses expect to grow by more than 20 percent this year.
Unto itself, this is terrific news – made all the more so when compared with research findings in recent years. For instance, in both 2013 and 2014, 76 percent of small business owners participating in the study said they anticipated revenue growth – not shabby by any stretch of the imagination, but rather modest when compared to the near universal unanimity of the 2015 numbers.
Also heartening is the broad spectrum of industries expressing that level of optimism. The most bullish were consulting/marketing services firms, beauty/fitness/spas, retailers, restaurants, home services, manufacturing, and auto/transportation.
Just where is all this growth going to come from? The study reports much of it will derive from investing in new marketing initiatives as well as launching new products and services. More specifically, seven in ten businesses said they plan to broaden their product lines, while slightly more than half said they intended to ramp up marketing efforts.
Survey participants said much of that increased marketing will take on a highly technical bent. Many said they planned to target investments in social media, search, and content marketing.
Naturally, not all is rosy. Access to capital is worrisome to some 50 percent of survey participants, and 53 percent identified ongoing cash management as their top priority.
But, what’s also provocative is the means through which small business owners hope to address those financial concerns. Many survey participants said they would turn to bootstrapping and other so-called alternative funding sources to fuel growth. By contrast, only a skinny 14 percent said they would approach traditional banks for their funding needs.
Still, there’s more good news. One is that the Kabbage findings are by no means the sole forecast of a positive 2015 for small business. According to the CAN Capital Small Business Health Index, another barometer of small business health, 58 percent of small business owners expect growth in 2015. More corroboration: 38 percent of business owners polled will grow by expanding or trying new forms of marketing.
Like the Kabbage study, the CAN survey also reveals some of the concerns small business owners have when planning for growth.
Thirty-five percent of business owners said offering competitive pricing while competing with larger businesses was their greatest challenge, while about 21 percent cited the ability to offer competitive benefits to employees.
In fact, according to the survey, 34 percent of business owners identified rising employment costs as the biggest threat to the future growth of their companies. Specifics sited by some employers included the Affordable Care Act, minimum wage increases, and new overtime change laws.
And, of course, something of a wild card in all of this is the circus in Washington DC. Small business remains skeptical – justifiably so – about President Obama and Congress’ capacity to agree on legislation of value to small business owners. Whether a changeover in Congressional control will have any real effect remains to be seen.
Overall, though, small business owners and entrepreneurs should be poised for a solid 2015. By all indications, if you’ve been holding off plans to expand or to grow your product line, this may be the year to pull the trigger.
That’s more than just good news for the small business community. Since small businesses comprise roughly 54 percent of all domestic sales and account for two-thirds of all net new jobs, that’s welcome news for everyone, small business owners and otherwise.