A tightening loan market and increasing inflation are two economic obstacles that small business owners face, yet they remain optimistic about 2024. 75% express optimism about the year’s prospects, with 62% anticipating a profit surge despite the high inflation and 11 interest rate increases in 2022.
Small business owners remain optimistic despite recent challenges like 71% inflation and 77% apprehension about capital access, with three-quarters expecting an optimistic financial trajectory in 2024 despite recent hurdles.
Small business owners are actively contributing to economic vitality, with 57% planning to create jobs and 62% expecting an increase in profits. They also report a 9% increase in rating the current economy as good or excellent, a significant shift from their previous sentiments three months ago.
The Goldman Sachs/Babson College 10,000 Small Businesses Voices survey, which interviewed 1,459 alum business owners from 48 states, Puerto Rico, and Washington, DC, revealed that despite the current challenges, owners of successful businesses are well-positioned to face 2024 with hope, strategic resilience, and a growth-oriented mindset.
Important conclusions consist of:
1. An analysis of the last four years reveals which were the hardest for small businesses.
2. Financial Trends and Optimism: What gives you the most optimism?
Seventy-five percent of small firms anticipate positive financial trends in 2024.
• Of these, 62% anticipate more profits.
• 57% anticipate adding additional positions.
3. Outlook for Profitability: Which do you anticipate will be more profitable in 2024 based on the previous years?
• 2020: 5%
• 2021: 10%
• 2022: 12%
• 2023: 10%
• 2024: 52%
4. Economic Outlook: In what way do you see the economy developing?
• Outstanding: 2%
• Well: 26%
• Equitable: 44%
• Not good: 21%
• Extremely Low: 6%
5. Inflationary Pressures: How has your company’s inflationary pressure changed over the past three months—has it increased, reduced, kept the same, or are you unsure?
• 71% believe it has gone up.
• 25% did not change.
• A 3% drop
• One percent are unsure.
6. Obtain Capital: We questioned if your company could afford to take out a loan given the present interest rate environment, and 77% of SME owners expressed anxiety about their capacity to obtain capital.
• Of those surveyed, 53% said no.
• 32% asked Indeed.
• 16% are unsure.
7. Impact on Growth Forecast: We inquired about the potential effects on those business owners’ growth plans.
• 86% of respondents say that a decrease in capital availability will affect their growth projection.
• 62% would abandon ambitions for growth.
• 43% would fire employees.
8. Loan Applications and Challenges: The business owners responded as follows when questioned about incoming loan applications:.
35 percent obtained new loans.
• 79% of respondents said it was hard to get inexpensive financing.
Forty percent of the financing requests were granted.
28% thought the terms of payment were exploitative.
9. Labor Market Difficulties: Inquiring about necessary job vacancies and the structure of labor markets?
• Currently, 52% of small firms are recruiting.
• 81% of respondents say it’s difficult to locate qualified applicants for available jobs.
These results provide important insights into the strategies and outlooks of small business owners for the upcoming year, painting a complete picture of the difficulties and hope faced by them.
