Small business owners (SBOs) across the U.S. expect larger increases in revenue this year than in 2018, despite growing trepidation about the national economy and inflation, according to the 2019 Small Business Survey conducted by TD Bank,. SBOs show continued optimism about their businesses' prospects, with 54% anticipating revenue growth, compared with 52% who expected such gains in 2018.
Hiring also is on business owners' minds: 23% said they will increase staff this year, compared with 21% in 2018. To support and fuel growth plans, business owners are primarily focused on expanding product lines/services (46%) and expanding production (39%) in 2019, and 43% will seek credit.
What's not impacting the bottom line? Tax reform. 64% of SBOs said they did not benefit from tax code revisions, in line with last year's survey when nearly half of respondents stated the Tax Cuts and Jobs Act would not aid their business. However, 90% do think at least one of the provisions could benefit future filings.
While SBOs remain confident, they are watching external pressures that could challenge operations over the next 12 months. According to respondents, their top obstacles include the health of the national economy (37%), inflation (21%) and finding qualified workers (18%).
"Small business owners frequently report a positive outlook for their business, but they need to create strategies that account for growing headwinds and plans for how to increase revenue while reducing costs," said Jay DesMarteau, Head of Commercial Specialty Segments at TD Bank. "Small businesses often are called the backbone of the American economy, and their continued dedication to their communities is important whether they are an internet-based business or a storefront. This commitment makes small businesses valuable assets to their region and can help shelter SBOs from some national pressures."
Investing in Tech for the Future
Although many SBOs still value offering the "mom and pop" experience, longevity depends on making their business more efficient and attractive to customers. Not surprisingly, technology and digital investments, from banking transactions to point of sale systems, drive this evolution. SBOs report confidence in their ability to use digital/online banking features (76%) and the latest online payments and POS technology (63%), showing they are committed to adapting to a changing consumer landscape and creating efficiencies that save resources.
SBOs are also more enthusiastic about integrating payments technology. When asked how they collect customer or vendor payments, respondents named electronic transfers like ACH (26% vs. 23% in 2018); person-to-person apps such as Zelle (23% vs. 19%); and e-commerce (24% vs. 23%), although checks/cash still rule. Many SBOs also view incorporating payments technology as an investment, with 12% of respondents adding mobile POS capabilities to their business offerings to increase revenue and/or profits.