Small business owners are seeing signs of progress in the economy, according to a new survey, but remain concerned about winning new customers to grow their business.
The quarterly survey, by Capital One Small Business Banking, found that a large majority (nearly 80 percent) of the small business owners surveyed in the first quarter of this year believe that economic conditions are either improving or holding steady. In addition, 39 percent of small business owners report that their companys financial situation is better than it was last year (an increase of 11 percentage points over fourth quarter results) while 38 percent say that the firms finances have been stable over the past 12 months.
While most (70 percent) of the small business owners surveyed said they are able to access the credit or financing they need and more than half (60 percent) plan to maintain their current level of spending on business development and investments, most remain cautious when asked about hiring plans. The majority (62 percent) of those surveyed said they do not have plans to hire new talent over the next six months.
While many small business owners nationwide appear to be experiencing gradual improvements financially, they continue to be mindful of their plans for future growth. Just over two-thirds (69 percent) said they are looking to grow their business by increasing turnover, sales, and number of customers, and 33 percent would like to expand their premises, add new sites or move into new markets. When looking ahead to potential challenges over the next six months, almost half (48 percent) of small business owners cite the ability to obtain new customers as one of the biggest challenges they will face, while 30 percent cite the need to maintain existing customers.
Bank financing is still the primary funding source for the growth of most small businesses. Half of the small business owners surveyed intend to finance their growth through commercial banks and lenders. One-third (33 percent) intend to finance their growth through personal savings, and 9 percent intend to use financing from outside partners.
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