AmEx survey: Outlook gloomy for growth of small businesses in U.S.
Confidence is eroding among small businesses today with owners worried over their growth prospects in an inflationary economy with soaring interest rates and workforce shortages.
That’s what operators are telling American Express, which surveyed operators of small companies ranging from those with just a few employees to upward of 500 workers. It’s a gloomy outlook.
“People are not as confident about their prospects for growth,” says Brett Sussman, a senior vice president at the financial services company most known for its credit cards.
Financial anxiety worsens among owners with just a few employees vs. larger small businesses. About half of owners overall are confident about their financial futures while only 30% of those with fewer than 20 employees are optimistic moving forward.
Just as concerning, 40% of those owners are watching growth opportunities slip by because they don’t have the financial tools to make needed investments.
Across the nation, small businesses are increasingly worried about increasing their operations. The study surveyed businesses with fewer than 500 employees across multiple sectors in American Express’ inaugural small business confidence report, which focused on uncovering the factors influencing financial decisions small businesses encounter and are most concerned about.
“There’s a little bit less optimism right now for small business owners about growth prospects,” Sussman said of the findings. “They are really seeking better solutions and tools to get them cash flow so they can make growth decisions.”
Most problematic, 32% of owners wanted more guidance on cash flow and 31% said they want more help on how to manage expenses. That uncertainty around cash revealed 41% of small businesses owners are bypassing potential growth opportunities.
At the same time, small businesses are curious about how artificial intelligence can improve efficiencies and they’re starting to experiment with AI technology, primarily in the customer service areas. They see it as a potential opportunity to lower costs as expenses escalate in other areas.
“By tracking the financial confidence level of small business owners, this report will help uncover the trends we’re seeing behind key money-making decisions businesses owners must make, how the macroenvironment [can affect] those decisions and what can help boost their confidence,” said Anna Marrs, Group President of Global Commercial Services and Credit & Fraud Risk at American Express.
Regarding AI experimentation, four of every 10 small businesses indicated they are prioritizing artificial intelligence to help them make financial decisions. The top three areas for exploration are helping them save time, im
proving data security and delivering greater efficiencies in customer service. The largest small businesses, those with more than 100 employees, are more confident of the benefits that AI can deliver — 75% said they find it supportive.
Not surprisingly, younger businesses owners are more open to AI applications for their companies. More than half of those 35 and younger are prioritizing AI usage while 24% of older generations are on board.
Worker shortages have been an obstacle throughout the pandemic and remain so today. Just more than half of the businesses are trying to hire — and 70% of those are motivated by financial and business improvements.
SUPPORT FOR ENTREPRENEURS
Global banking giant Goldman Sachs is taking its 10,000 Small Businesses initiative to Northwest Arkansas later this year. The free seminars are delivered online, although the closing session in December requires in-person attendance from the business owner.
Applications for the program are due by June 29 for the 12-week program, which helps entrepreneurs and small-business owners identify key metrics to help outline a growth plan for their companies.
The program requires revenues of more than $75,000 in the most recent fiscal year and companies must be in business for at least two years and have at least two employees, including the owner.
Programming begins Sept. 13-15 with an orientation and there are nine sessions focusing on issues such as financial statements, leadership, hiring, marketing and sales, operations and lending so participants can build a sustainable growth plan for their business.
Concluding sessions from Dec. 6-18 will be in-person and will concentrate on implementing the growth plan and creating an advisory board to support the strategy.
Goldman Sachs is investing $500 million to spur entrepreneurial activity in rural communities. More information is available at goldmansachs.com.
WORKING DADS INFO
Father’s Day brings news that Arkansas ranks in the bottom tier of states that are friendly to working dads.
A survey by WalletHub finds that 93.7% of married fathers have jobs and Massachusetts is the most welcoming to working fathers while Arkansas ranks 41st in the nation. The results are based on 23 key indicators ranging from the average length of the workday for men to childcare costs to the share of men in good health or better.
Finding work-life balance is the top issue facing fathers and mothers today. The survey found that 71% of married women also have jobs.
“Compared to women, men have less freedom when it comes to choosing how much time to spend at work and how much time to spend at home with the kids and doing work around the home on behalf of the kids,” said Linda Nielsen, an education professor at Wake Forest University. “Most Americans still believe that dads should earn most of the money and moms should do most of the direct childcare and do most of the unpaid work in the home on behalf of the kids.”
More information is available at wallethub.com.