Daily News: August 22, 2014

Millennial Small Business Owners Most Optimistic

According to Capital One’s second quarter Spark Business Barometer, a quarterly survey measuring the economic perceptions and financial conditions of small business owners, millennial small business owners are feeling the most positive about running and growing their business in today’s economy.

The nationwide survey revealed that overall small business sentiment is up – with 39% of all small business owners reporting a better financial position today compared to one year ago. That positive perspective was particularly true for millennials (18-33-year-olds) who were the most optimistic group surveyed when asked about their sales volume, economic outlook and plans for growth. In fact, nearly two-thirds (62%) of millennial small business owners reported increased sales in the past six months, compared to 41% of small businesses overall and 45% of millennial small business owners plan to hire in the next six months (versus 30% of all small business owners). The survey also found that more millennials support legislation, like minimum wage increases, that could improve their workforce’s financial position.

The second quarter Spark Business Barometer’s key findings are summarized below:

  • Small business sales are up. According to this quarter’s survey, 41% of small business owners increased sales over the last six months, while more than one third (34%) report that sales have remained the same. Small business sales results have been trending upwards, with more small business owners reporting sales improvement than sales stagnation in each of the previous three quarters.
  • Positive future outlook is on the rise. Looking ahead, small business owners are cautiously optimistic about the future. The survey found that while 45% of small business owners believe their firm’s financial situation will be better in six months, another 45% expect their situation to remain the same. This sentiment has improved steadily over time – in Q1 2009, 34% of small business owners indicated that they felt their firms’ financial positions were worse than the previous year.
  • Optimism at the local level is exceeding optimism at the national level. Small business owners across the country continue to be more confident in the outlook for the local economy than the national economy. Nearly half (49%) of those surveyed are optimistic about the direction the national economy is headed in the next 12 months, although sentiment among millennials is significantly higher (79%) than the national average. Three-quarters (74%) of millennial small business owners consider business conditions excellent or good – only half (51%) of total small business owners agree with this sentiment. Optimism in the national economy is down 3% since the first quarter.
  • Current financial situations are improving. When asked to compare their current financial situation with this time last year, 39% of small business owners believe they are better off, which is a 5% improvement since the previous quarter and the highest since 2012.
  • Millennial small business owners are more likely to support minimum wage increases. Small business owners overall are divided on proposed minimum wage increases. More than one-third (36%) are in favor of the proposed increase, while another one-third (36%) are opposed. Nearly half of millennial small business owners (47%) support the proposals.
  • Small businesses owned by millennials are more likely to hire in the next six months. Forty-five percent of millennial small business owners intend to hire new employees, compared with 30% of small business owners overall.
  • “Small businesses have a tremendous impact on our local and national economies, with two out of three new jobs being created by small businesses, and the countless product and service innovations they bring to the marketplace,” said Keri Gohman, head of small business banking at Capital One. “Owning a small business isn’t always easy, but it can be incredibly rewarding, and we’re committed to understanding and helping address the unique needs and challenges today’s business owners face. Whether it’s through business intelligence and insights, digital tools and resources, improved access to capital, or industry leading rewards programs, we’re focused on enabling and empowering both aspiring and established businesses – and helping them achieve their goals.”