Small business owners are feeling good about revenue, credit and hiring this quarter, according to a new study by Wells Fargo, finding that optimism is at the highest it’s been in a decade. And it has risen significantly this year, with the score in the Wells Fargo/Gallup Small Business Index up 11 points from April.
According to Wells Fargo, this upswing is tied to sales and a better financial outlook. “Our latest survey tells us that small business owners continue to feel confident about their current situation and are optimistic about the future,” said Mark Vitner, Managing Director and Senior Economist, Wells Fargo.
“As the economy strengthens, small business owners are reporting improvements in their day-to-day operations, particularly their sales. With their finances in better shape and fewer business owners expressing concern about the regulatory environment, more businesses are planning to boost capital spending and hiring. It’s reassuring to see these improvements, and to see that optimism has returned to its highest level since early-2007,” he said.
Revenue, hiring, and credit
There are a variety of reasons why small business owners are feeling optimistic, starting with their own financial outlook, with 76% indicating that they are either in a somewhat or very good financial situation, up three points since April. And going hand-in-hand with this is having a healthy revenue stream, just about half (46%) saw an increase in their revenues over the last year, up from 41% last year.
The availability of credit can play a big role in how small businesses are doing, and here too things are looking up, with 48% reporting that they think it will be somewhat or very easy for them to get credit during the coming year.
There are Challenges too
While they are definitely feeling optimistic, there are challenges for small businesses. When it comes to hiring finding quality staff and keepingthem is high on the list (13%), and right behind that is bringing in new customers and business (12%).
The other challenges might not be a surprise and include taxes, government regulations and financial stability/cash flow (9%). And last but not least, 5% worry that the economy might decline, which is down 5% from April.
The Wells Fargo/Gallup Small Business Index was carried out from July 10 to 14.