We track the latest data on small business prospects so you don't have to. Each week, Tom Sullivan analyzes new data from NFIB, Intuit, WSJ/Vistage and more to provide the weekly economic forecast for small businesses.
latest forecast
Since it's the first week of the new year, I'd like to ask a question rather than a prediction. The question is, how can small businesses grow without hiring more employees? You'll know the answer to that question when you look back a year from now.
Its meaning: The data and outlook for small businesses entering 2024 is cautiously optimistic. Concerns about inflation remain at the forefront, and whether Main Street employers can grow without adding employees is a question that millions of successful small businesses will answer throughout the year.
The state of American business in 2024
It's almost time for our major annual event! This year, President and CEO Suzanne P. Clark is championing the free enterprise system and the power of American business to serve customers and solve problems. and celebrate its ability to strengthen society.
Please join us January 11th from 11:00 a.m. to 12:30 p.m. Eastern Time
listen: Tom Sullivan and Holly Wade of the National Federation of Independent Business (NFIB) discuss small business forecasts in their weekly podcast. Listen here.
clock: Get the latest small business policy updates, news and analysis from Tom Sullivan every month on ASBN (America's Small Business Network). Look here.
Just released! The fourth quarter MetLife and U.S. Chamber of Commerce Small Business Index was released on December 12, 2023.
New small business data
National Federation of Independent Business (NFIB) Loan Sales Survey(December 27, 2023)
summary: The outlook for small business owners turned negative in the second half of 2023 due to concerns about high interest rates. Main Street's view of the nation's economy was hit the hardest.
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26% of small businesses have borrowed or attempted to borrow in the past three months (up 5 points from July), with expansion being the top reason for borrowing money (29%). This is a change from July, when his main reason was “business expansion.” Meet operating and inventory expenses (33%).
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Among the borrowers, 56% received a term loan and 28% received a line of credit.
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Among borrowers, complaints about high interest rates rose from 58% in July to 80% in December, while satisfaction with loan terms and interest rates fell from 32% to 8%.
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91% of small business owners feel positive about their company's financial health (down 5 points from July).
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67% of small business owners NationwideThe economy has worsened (negative ratings have increased by 9 points since July), and 22% of small business owners reported poor business performance. localThe economy was bad (negative ratings increased by 2 points since July).
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83% of small business owners (up from 90% in July) were unfamiliar with the reporting requirements under the Corporate Transparency Act (also known as reporting “beneficial ownership” to FinCEN), which goes into effect next week.
SBE Council Small Business Diagnostic Opinion Survey Q4 2024(December 20, 2023)
summary: Approximately half of small business owners have a positive view of their company's performance in 2024. Concerns about inflation outpacing sales will continue into the new year.
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50% of small business owners report that their business will be profitable in 2023, and 61% have a positive outlook for their business in 2024.
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55% of small business owners report that their revenues are not keeping up with inflation.
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34% of small business owners report that their sales will increase in 2023, and 32% report that their sales will decrease.
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31% report that profitability will increase in 2023, and 39% report that it will decrease.
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71% of small business owners have a negative outlook on future economic conditions, with inflation at the top of their list of concerns (87% are concerned that inflationary pressures will continue into 2024).
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71% of small business owners have taken or plan to take steps to prepare for a recession.
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32% of small business owners plan to increase their headcount in the next six months, and 50% plan to maintain their current staffing levels. 13% of small businesses plan to downsize.
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68% of small business owners believe they can start their business in 2025.
Intuit QuickBooks 2024 Entrepreneurship Report (December 19, 2023)
summary: With Gen Z's growing interest in entrepreneurship, the fate of Main Street will depend heavily on its ability to hire and retain talented employees, paving the way for 2024.
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23% of American consumers are considering starting a new business next year (up 3 points from two years ago).
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Start-up plans appear to decline with age, as 28% of Gen Z (up to age 26) plan to start a business next year. 26% of Millennials (ages 27-42), 20% of Generation X (ages 43-58), and 10% of Baby Boomers (ages 59-68) plan to start a business in 2024.
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Small business owners predict that hiring skilled workers will be the biggest driver of business growth in 2024, and inflation will be the biggest barrier.
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89% of small employers hope to hire additional staff next year. More than 50% of small business owners want to rely on their 1099 contractors rather than their W-2 employees, with the highest percentage coming from independent contractors (non-employers) .
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57% of small business owners said their annual income was less than $100,000. 33% said they earned less than $25,000 a year from their business, and 10% said they earned less than $5,000 a year.
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53% of new small businesses say digital technology has made it easier to start their business.
Goldman Sachs 10,000 Small Business Voices Holiday Poll (December 18, 2023)
summary: A survey was conducted of 337 retail small and medium business owners from December 1st to December 8th. The forecast for 2024 is grim due to declining sales and inflationary pressures.
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76% of small business owners surveyed reported no increase in sales this holiday season compared to last year, and 55% said their profit margins were down.
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82% of small businesses surveyed reported raising prices in 2023 to cope with rising costs.
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66% of small business owners said inflationary pressures are making it difficult to keep prices low.
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Small business owners are planning the following strategies to overcome shrinking profits.
Fourth Quarter MetLife and U.S. Chamber of Commerce Small Business Index (December 12, 2023)
summary: Although the negative situation for the national economy continues, confidence in small and medium-sized enterprises' own cash flow remains strong.
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The index fell 8 points from the third quarter to a level of 61.3, returning to the level of confidence seen earlier this year and consistent with the fourth quarter of 2022.
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A higher percentage of small businesses (53%) are negative about the U.S. economy (up 10 points from last quarter), while 25% (down 8 points) are positive about the overall health of the economy.
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This is the eighth consecutive quarter that inflation is the top concern for small businesses (50%), with revenue the second biggest concern (22%).
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42% of SMEs plan to increase investment in the next 12 months (unchanged from the last two quarters) and 40% of SMEs plan to add employees (unchanged from the previous quarter) ). Although 6 percentage points lower than the previous two quarters' highs, the proportion of small and medium-sized businesses expecting revenue growth remains high (65%).
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64% of small businesses believe the health of their business is good (down 2 points from last quarter) and 67% are satisfied with their current cash flow (down 5 points, but in 2022 coincides with the fourth quarter).
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45% of small employers are looking for new talent in 2023, and 60% of them said it will be difficult to meet salary expectations.
Explore more small business data
The MetLife and U.S. Chamber of Commerce Small Business Index is a quarterly survey designed to provide a comprehensive quantitative snapshot of the small business sector and explore small business owners' perspectives on the latest economic and business trends. It will be announced.
About the author
Thomas M. Sullivan
Thomas M. Sullivan is vice president for small business policy at the U.S. Chamber of Commerce. Mr. Sullivan works with a national network of chambers of commerce and national chambers to leverage the voices of small businesses and translate their grassroots power into federal policies that promote free enterprise and reward entrepreneurship.he runs america
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