Fourth Annual First Citizens Bank Small Business Forecast Shows U.S. Small Business Owners Positive About 2018, Less Certain About Long-Term Economy
RALEIGH, N.C. — The fourth annual First Citizens Bank Small Business Forecast reveals that the majority of small business owners are positive about 2018 but are less certain about the long-term economy. The findings were released during National Small Business Week, April 29 to May 5, 2018.
Overall, 75 percent of respondents believe their businesses will grow or expand in 2018, with the strongest confidence among millennial small business owners (80 percent). Meanwhile, 60 percent of respondents are optimistic about the U.S. economy in the next two to three years, but the percentage is 8 percent lower than in 2017. Millennials had the most significant decrease in their economic views, down by 21 percent from last year.
Kate Stackhouse, director of sales strategy at North Carolina-headquartered First Citizens Bank, acknowledges the importance of small business owners saying, "Small businesses are key drivers of our economy. Not only do they promote innovation and add strength to their local communities, they can feel the effect of economic changes more readily than larger companies do. During National Small Business Week, and every week, it’s imperative that we understand and work with the small business community so we can help them flourish and prosper."
Other key findings from the study:
- The sentiment around the recent tax reform leans positive. More than half (55 percent) of the total respondents expect their own businesses to benefit from the 2018 tax reform and believe small business owners in general will benefit from it.
- While 2017 was a good year, 2018 is a good one too. Six out of 10 respondents plan to grow their business in the next 5-12 month, and 62 percent are confident about the overall U.S. economic conditions in 2018. Finding different avenues for reaching new leads/prospects is the top sales initiative for 2018, followed by growing the sales pipeline and improving closing rates. Meanwhile, 76 percent of respondents considered their business successful in the previous year, including 28 percent who said it was very successful. This percentage is three percent higher compared to the results in 2017
- Social media is still a top tool for small businesses. Social media (54 percent) and word of mouth (48 percent) are the most popular resources for learning about small business trends among all respondents. Consistent with the results in 2017, conferences remain one of the top resources for millennial owners to learn about small business trends.
- Talent acquisition is a concern. A lack of qualified candidates (25 percent), fierce competition for talent (24 percent), and costs for onboarding new hires (21 percent) are considered the top three talent challenges in 2018.
- Millennials are more likely to seek funding. Twenty-eight percent of small business owners plan to secure funding to expand their business in the next 6-12 months. A larger percentage of millennial small business owners (41 percent) indicate they plan to secure funding.
- My state is great for business! Sixty-three percent of respondents believe the state where their business is located is a great place to start a small business. Among the markets surveyed, Florida had the highest percentage of respondents who considered the state to be a great place to start a small business (69 percent). While millennials had the highest percentage of those who think the state where their business is located is a great place to start a small business (65 percent), the percentage is 13 percent lower than in 2017.
The First Citizens Bank Small Business Forecast is conducted annually in California, Florida, South Carolina and North Carolina to assess the motivations, sentiment and success of U.S. small business owners. For more information, visit www.firstcitizens.com/smallbizstudy.
About First Citizens Bank
Founded in 1898 and headquartered in Raleigh, N.C., First Citizens Bank is the largest family-controlled bank in the U.S., with offices in 21 states. Drawing from over a century of experience serving the needs of business customers, First Citizens focuses on developing long-term relationships and offers a comprehensive array of products and services to help small businesses manage their finances and grow. First Citizens Bank is a major subsidiary of First Citizens BancShares Inc. (Nasdaq: FCNCA), which has over $34 billion in assets. For more information, call toll free 866-FCB 4BIZ (866-322-4249) or visit firstcitizens.com/business. First Citizens Bank. Forever First®.
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