Get All Access for $5/mo

Entrepreneurs See Brighter Days for Their Business, Not the Economy In two surveys released today, small-business owners report being more optimistic about their company's future, though concerns persist about government regulation, the economy, taxes and health care.

By Cheryl Winokur Munk

Opinions expressed by Entrepreneur contributors are their own.

Shutterstock

Despite heavy headwinds, small-business owners report being more optimistic about their business prospects than they were several months ago, according to two reports published today.

Eighty-four percent of business owners with companies under a year old say they are confident or very confident in their companies' prospects for profitability in the next 12 months, according to a first-quarter report by the Ewing Marion Kauffman Foundation and LegalZoom that surveyed 1,650 startup founders in February. This is the highest level since the quarterly confidence survey launched in early 2012, and reflects an increase of 1 percent since the fourth quarter of last year.

Meanwhile, a survey by Wells Fargo and Gallup also showed a slight increase in optimism among 603 small-business owners with up to $20 million in revenue. The quarterly index measures the owners' outlook on company finances, hiring and credit availability. It rose seven points in April from January, boosted primarily by improvement in company cash flow.

To be sure, entrepreneurs tend to be an optimistic bunch, and they also acknowledge remaining challenges. One-in-five of the Wells Fargo respondents cited attracting customers and new business as the most important challenge facing them today. Government regulation was the second most common concern, followed by the weak economy, taxes and health care.

Related: Tax Dilemmas Add to Burden of Healthcare Reform for Entrepreneurs

"Business owners are opening their eyes to new opportunities, and they see that the road ahead looks somewhat better," says Doug Case, a senior vice president and small-business segment manager at Wells Fargo. "While it's better than it has been, there's still a sense of caution looking forward."

Despite being optimistic about their own companies' profits in the year ahead, entrepreneurs' faith in U.S. economic growth weakened from the fourth quarter of 2012, according to the Kauffman study. Just 39 percent said they expected the economy to improve over the next 12 months, compared to 44 percent in the previous quarter.

Meanwhile, the hiring picture seems to be getting bleaker among early-stage companies, the Kauffman data suggests. In the fourth quarter of last year, 37 percent of the respondents planned to hire. In the most recent survey, only 32 percent expected to hire more employees in the next 12 months.

Related: Survey: Fewer Small Businesses Expect to Hire or Grow

Cheryl Winokur Munk is a freelance writer and editor in West Orange, NJ. She is a former reporter for Dow Jones Newswires and American Banker where she covered the financial services industry. She earned a B.S. in journalism from Boston University.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

The Side Hustle He Started in His College Apartment Turned Into a $70,000-a-Month Income Stream — Then Earned Nearly $2 Million Last Year

Kyle Morrand and his college roommates loved playing retro video games — and the pastime would help launch his career.

Business News

A Former Corporate Lawyer Now Makes Six Figures on YouTube — Here's How She Does It

Here are the secrets to starting and growing a successful YouTube channel, according to a YouTuber with millions of subscribers.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Growing a Business

How to Determine The Ideal Length of Your Marketing Emails Your Customers Will Actually Read

Wondering how long your marketing emails should be? Here's what consumers say — so you can send them exactly what they like.

Business News

Y Combinator Helped Launch Reddit, Airbnb and Dropbox. Here's What I Learned From Its Free Startup School.

The famed startup accelerator offers a free course on building a business — and answers five pressing questions for founders.