Amid Small Business's Surging Optimism, 5 Insights from Main Street Can Guide Your Entrepreneurial Path
According to recent results of the U.S. Chamber of Commerce & MetLife Small Business Index (SBI), a quarterly survey of 1,000 small business owners nationwide,* optimism is at an all-time high. This rise in business confidence points to a rebound in the national outlook and reflects the highest levels yet recorded in this survey's seven quarters, to date.
If you have a business or are preparing to take the plunge into full-fledged entrepreneurship, the survey’s results point to five ways in which you can put the positive economic outlook to work for your own company.
1. Conditions favor lending, so take advantage.
Less than 25 percent of small businesses surveyed reported that it is hard to obtain financing; and fully two-thirds of the small businesses in the study that applied for credit said they'd received the full amout of their request.
In short: Access to capital has scarcely ever been better: Small business financing approval rates have increased by nearly 200 percent in the last seven years, from 8.9 percent to 25.9 percent, in 2018, according to the Biz2Credit Small Business Lending Index.
The old adage that you need money to make money still rings true, but just because it’s easier to borrow as a small business today does not mean that the majority of small businesses are actually taking advantage, even with lenders eager to grow their portfolios and interest rates still at historically low levels.
The message: If this is the first time you’ve considered borrowing for your business, don’t discount the value of a mentor to advise you before you visit your local bank or look online for quicker finance options. No mentor on speed dial? No worries; check out these free small business mentoring options. There are also a growing number of alternatives to traditional bank loans, including online lenders like Kabbage and OnDeck.
2. Keep pace with tech and you will be rewarded.
The survey found that, nationally, only about a quarter of small business owners surveyed felt that they were ahead of the technology curve. But they reported stronger outcomes and increased confidence than those entrepreneurs who said they felt hopelessly behind when it comes to technology.
The latter group needs to catch up because the demand for technology is significant. According to a separate study by the U.S. Chamber of Commerce:
84 percent of small enterprises surveyed were using at least one major digital platform to provide information to customers.
80 percent of thsoe surveyed were using at least one major platform to show products and services, as well as to advertise.
79 percent were using digital tools to communicate with customers and suppliers
75 percent were using tech platforms for sale
A particular area where small businesses have been slow to adapt is the internet of things. Gartner research indicates that new and established IoT vendors will compete heavily for small and medium-sized businesses, driving IoT costs down more than 50 percent.
The message: Consider creating a technology investment plan as part of your strategic planning efforts. Focus on education and seek out online training with groups that help small business owners level up their digital skills, such as the Digital Marketing Institute.
Critically, you should make sure you ask your providers the right questions. Software vendors can provide you insights into how they’ll be adding new offerings, such as artificial intelligence support, to upcoming versions, and how they expect these advancements to benefit your business.
The data is clear. Business owners who believe that they have a better grasp of the latest technology also have higher business confidence and report better business performance.
3. Call your CPA now. Don’t “wait ‘til next year” to take advantage of tax reform.
According to the Chamber study, 54 percent of small business owners surveyed said they believed tax reform will help the national economy, and 47 percent said they anticipated that it will also help their business. One example, from the the Tax Cuts and Jobs Act (TCJA), is the 100 percent first-year bonus depreciation -- generally for new and used qualified property, including heavy vehicles.
It’s already clear that small businesses are re-investing tax cuts to give pay raises, increase benefits and provide capital improvements. However, tax reform is complicated and there are several things you should do now to take advantage of reforms that have been targeted to benefit small businesses.
The message: Do not wait until spring of 2019 to talk with your tax advisor or CPA.
4. Women Rule! Women-owned businesses are on the rise
We don’t think that it’s a coincidence that the top small business advisor to the president is an extremely successful womanpreneur, Linda McMahon. Not only are women business owners bullish about our current economy, but the statistics about women-owned businesses are eye-popping. Over the past 10 years, the growth rate of women-owned businesses has been five times the rate of all new business formation.
Couch Clarity, owned by author Melissa Bercier, belongs in the league of women-owned businesses that provided nearly nine million jobs and generated $1.6 trillion in revenue in 2016. Bercier adds to this trend by mentoring nine therapists, takes part in community events with other entrepreneurs and engages with other women business owners on a national small business council to help her improve her own business. I
The message: If you’re a woman, there’s never been a better time to launch your entrepreneurial career and turn that big idea into a successful business.
5. Prioritize your self-care and avoid emptying your energy tank.
Positive mental health means business success. And there's a reason for this: Entrepreneurship is not for the faint of heart. Small business owners spend on average of 14-plus hours a day working on their business. That’s nearly double the 7.8-hour workday for the average American worker.
The SBI revealed that respondents slept 6.7 hours a night on average, less than the eight recommended hours. And that's potentially problematic because studies show that after a certain point, productivity drops off significantly. Employee output actually falls after 55 hours a week: Someone working 70 hours a week, for example, has the same production level as someone working 55 hours over the long term.
In addition, it's probably no surprise that fatigue stifles emotional intelligence and that decision-making abilities decline. When we are running and growing a business, oftentimes our self-care tends to fall by the wayside.
So, what are the answers? One is to seek therapy to work on goals; others are to walk and talk with a friend, exercise, eat healthy, take up a hobby and make family time and socializing a priority in your week.
The message: Prioritize your personal needs so you can run your business with your energy tank on full. Making a small positive change in your self-care each day creates positive mental health and leads to business success. Don’t forget to have fun as you walk your entrepreneurial path!
*Methodology: These are findings from an Ipsos poll conducted June 14 to July 27, 2018, via telephone, in English. For the survey, a sample of 1,000 small business owners and operators was sourced from the continental U.S., Alaska, and Hawaii. "Small businesses" were defined as companies with fewer than 500 employees that are not sole proprietorships. Industry segment breakdowns were: manufacturing and resources, 17 percent; education, health care and recreation, 22 percent; professional services, 25 percent; retail, 21 percent; other industries, 15 percent.