According to the Fall 2012 Bank of America Small Business Owner Report, the mood of small business owners is optimistic in terms of what they can expect in 2013. More than half of small business owners expect an increase in revenue over the next twelve months, with only 7 percent forecasting a revenue drop. Hiring outlooks look good as well. Almost a third plan to hire new workers next year, with 56 percent forecasting that they will keep those workers they have. Only 3 percent believe they will be downsizing in 2013.
One reason for this level of optimism is believed to be directly related to the degree of focus on local business opportunities (with 63 percent of respondents citing that their customers come primarily from the local community and 75 percent reporting that the local economy plays a significant role in their businesses). On the whole, small business owners were more optimistic about their local economies improving in 2013 than they were about the outlook of the national economy. Answers to the survey’s marketing section only served to underscore this focus on local customers, with 87 percent citing that “word of mouth” was their most effective marketing tactic.
Another factor playing into the overall small business owner optimism and confidence concerned the need for future capital, with only 16 percent planning to apply for a loan in the next year and 70 percent citing that they had access to adequate capital to keep their operations going. Interestingly, fewer than 17 percent of business owners considered big businesses to be their competition (in fact, nearly four out of five respondents had big businesses as customers).
However, this level of optimism doesn’t mean that small business owners aren’t concerned about the state of the economy on the national and even global level. The study cited five top concerns (all voiced by anywhere from 63 to 68 percent of respondents). These were: apprehension concerning the effectiveness of government leaders, the rising prices of commodities, the impact of healthcare costs, the recovery of consumer spending, and the strength of the U.S. dollar.
Lesonsky, Rieva. “Small Business Owners Think Local for 2013” Small Business Trends. 11/28/12.