While many businesses experienced a boost in sales during the fourth quarter of 2013 and an increased optimism about business prospects ahead, the overall economic outlook has worsened, with less than half of business owners anticipating favorable conditions over the next six months, according to Capital One’s latest Spark Business Barometer.
Despite the fact that more small businesses are reporting sales improvements, only 46 percent of small businesses expect their firm’s financial situation to improve over the next six months and 9 percent anticipate lower performance.
The quarterly survey of small businesses measures the economic perceptions and financial conditions of small business owners across the nation, as well as the most common trends and challenges that today’s small businesses face.
“On the heels of positive short-term sales results, our survey found that a growing number of small business owners continue to have concerns related to the economy, and are exploring and embracing new technologies to help manage their business and work more efficiently,” Keri Gohman, head of small business banking at Capital One, said in a statement. “This is a trend we’ll watch closely as Capital One continues to innovate and introduce digital products and services designed to optimize business.”
National sentiment about current business conditions among many small business executives is negative, as more than half (54 percent) consider conditions only fair or poor, representing a two-point increase compared to the previous quarter.
However, the 12-month economic outlook for local economies is predominantly positive with 56 percent of business owners reporting optimism compared to 39 percent reporting pessimism.
The survey also suggested small business owners believe mobile technology will have the most positive impact on interacting with customers (56 percent) and sharing office documents (16 percent).
About a third (33 percent) of small business owners use mobile business technology (on phones and tablets) every day, the report found.
Eighteen percent of small business owners say that marketing their business online is their No. 1 priority going into this year. Other priorities include improving work-life balance (14 percent) and incorporating new technologies into business management (11 percent).
“We continually strive to better understand the challenges and opportunities small businesses face every day. As their bankers and partners, our goal is to help our customers rise to meet those challenges and make the most of every opportunity,” Gohman continued. “When small businesses grow and succeed, the economy – both locally and nationally – is better for it.”
Nearly half of small business owners have yet to update their 2014 business plan–46 percent of small business executives had updated their 2014 business plan before the end of the fourth quarter of 2013, while 46 percent had not.
A majority (54 percent) of small business owners do not plan to have their 2014 business plan reviewed by a financial professional, with just under a quarter (23 percent) reporting that their business does not need it.
The report also revealed that, as with the national economic outlook, small business executives with primarily international customers (71 percent) are more likely to anticipate favorable conditions in the year ahead.