business leaders, small business owners, chase for business people in conference room people in conference room people in conference room people in conference room
Small Business

Managing Your Business

Small Business Owners Anticipate Changes (and Financing) Ahead

New Report Highlights Shifts in Expectations for Small Business Leaders

The 2016 Business Leaders Outlook surveyed middle market and small business owners about the current business environment. The small business report covered business owners' thoughts on today's economic challenges, opportunities and how they're planning for the year ahead.

Chase for Business(SM)

Predicting spending needs and larger economic changes is no easy feat for any business. To stay competitive, small-business leaders need to be nimble and focused, often while dealing with limited resources and economic uncertainty, as they try to anticipate what's ahead.

Fortunately, the crystal ball is glowing brightly for many small businesses right now.

"The last 12 months have been defined by increased customer optimism," says Cameron Brown, president of Boston-based King Fish Media. "Sentiment among executive management is largely positive, particularly in certain industries like financial services and technology."

Brown isn't alone in seeing a rosy future for business performance. In the recent 2016 Business Leaders Outlook Survey of small businesses, conducted by Chase, 69 percent of the nearly 1,000 small business owners surveyed expressed optimism about their company outlook for the year ahead.

Some are planning to obtain financing, increase employee numbers and pursue more mobile banking options. But they're also realistic about the challenges ahead.

Economic Outlook

According to the report, small-business owners see taxes and sales growth as top challenges, but they also noted concern about the uncertainty of economic conditions. Only 27 percent are optimistic about the global economy, with 43 percent feeling positive about the national economy and 53 percent expressing optimism about the local economy.

These numbers are about the same as last year's report, but one notable difference is in higher-revenue businesses (those with revenue from $500,000 to $20 million). Those company owners are less optimistic than last year about the national economy, with 46 percent feeling positive for 2016 versus 57 percent showing optimism for 2015.

However, optimism about the national economy is still higher than it was in 2013 and 2014, the report noted.

Financing and Technology

Despite concerns about the national and global economy, 59 percent of those surveyed expect sales to increase in the year ahead, and about the same amount anticipate profits to rise as well.

That expectation of growth may be what's driving an interest in financing and lending options. The report notes that more businesses than last year anticipate pursuit of financing, with 58 percent expecting to obtain new funds, with smaller businesses driving the trend.

Of those planning to take out a loan, 61 percent plan to borrow less than $100,000. Karla Pankow, who runs a farm enterprise called Bossy Acres in northern Minnesota, as well as an agricultural business consulting firm, said she sees financing at that level as a crucial component of small-business operations.

"Without strategic loans, we wouldn't be able to grow in meaningful ways," says Pankow. "Whether that means purchasing more technology, repairing equipment or expanding into new markets, these smaller-scale loans help us to achieve our aims."

One step forward that Pankow is taking, much like many respondents in the recent study, is to use mobile technology more often for managing business finances. Of those surveyed, 67 percent who use mobile banking see it as extremely or very important, and there's been an increase this year in small businesses using mobile devices for payments.

"My office is wherever I am," says Pankow. "That means my banking and my accounting functions have to be where I am as well. Mobile devices allow that to happen."

Employment Plans

As small-business owners explore financing options, they're also considering adding to their staff numbers, the survey noted.

Similar to last year's results, 25 percent expect to increase their number of full-time employees, while 31 percent are likely to take on more part-time employees. Compensation is also expected to rise for 36 percent of those surveyed.

As was the case in previous years, more high-revenue businesses expect to increase employment and compensation compared to smaller businesses. But even a few key hires at a small business can make a considerable difference for growth, says Brown.

"We're finding that there's a great deal of talent out there, and that makes us confident about more hiring," he says. "In general, we're seeing profound growth, and I think many small businesses can say the same."

Predicting what's ahead is never easy, especially in the business realm. But with strong indicators that financing, lending, mobile payments, employment and other factors are robust, small-business leaders are likely to welcome what the future brings.

View the 2016 Business Leaders Outlook report for small business here.

Screen Reader Users: To load more articles, scroll down the page, or click the list of articles.