Small-Business Owners Close Out 2018 With A Positive Outlook
U.S. small-business owners ended 2018 on an upbeat note, the Wells Fargo/Gallup Small Business Index shows. The quarterly survey found small-business owners are more optimistic about business conditions now than at any point in its 15-year history. The most recent survey, which measures small-business owners' attitudes about a wide variety of factors affecting their business, showed the overall index score is +129—up from the prior record high of +118 established last quarter. Confidence among small-business owners improved steadily in 2018 and now sits well above the pre-2018 high of +114 from 2006.
The Wells Fargo/Gallup Small Business Index has generally trended upward since 2013, and the most recent increase in the overall index score stems from upticks in most of the areas that compose the score. The biggest improvements are seen in owners' assessments of their current situation. The survey found that 80 percent of small-business owners rate their company's financial situation as very or somewhat good, the highest in index history, and a record high of 55 percent of business owners report increases in revenue over the past 12 months, up from 49 percent last quarter. Also, 74 percent of owners rate their company's cash flow as very or somewhat good, up from 69 percent the previous quarter—another record high.
When asked in the survey to give their projections for 2019, small-business owners returned a modestly optimistic outlook. It found that 33 percent of owners say they are more optimistic about their business' future going into 2019 than they were going into 2018, while 16 percent say they are less optimistic. However, the majority—51 percent—say their outlook on 2019 is about the same.
Small-business owners are divided in their views of what the newly-elected Congress will mean for their businesses in the new year. About half of owners—49 percent—say the new Congress’s actions won’t affect their business either way, while 24 percent feel it will leave their company worse off and 21 percent feel it will strengthen their companies.
The survey also asked small-business owners to name the most important issue for the new Congress to focus on. Taxes led the list of responses at 29 percent, while health care (12 percent) and government regulations (11 percent) rounded out the top three.
An open-ended question in the survey asked owners to name the most important challenge facing their businesses. As it has since the second quarter 2018 survey, hiring took the top spot, with 18 percent of respondents saying that finding and retaining qualified workers is their greatest challenge. Other issues frequently appearing in the question’s responses include finding and attracting customers, taxes, government regulations and maintaining cash flow.