PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

SBE Council “Pulse” Survey: Small Business Owners’ Insight and Outlook on the Economy

By at 27 December, 2023, 6:02 pm

by Raymond J. Keating –

Elected officials, policymakers, analysts, and talking heads would be wise to keep in mind that entrepreneurship is essential to U.S. economic, income and employment growth. Indeed, the U.S. economy very much is a small business economy, as illustrated by the fact that 98 percent of all businesses (employer firms and nonemployers) have fewer than 20 employees. Therefore, the views and expectations of small business owners matter to us all.

And SBE Council’s latest “Small Business Check Up Survey” is filled to the brim with critical findings regarding the views of small business owners on a host of issues.

In this analysis, let’s take a quick a look at small business views on the economy:

● Small business owners are positive on the current business environment, and that’s great. Indeed, 62 percent say it is excellent (20 percent) or good (42 percent).

● Looking at economic conditions over the next six months, 37 percent see matters getting worse, 32 percent expect condition to remain about the same, and 27 percent expect improvement.

● And entrepreneurs are worried about the economy over the coming year, with a rather astounding 87 percent concerned about inflation (49 percent “very concerned” and 38 percent “somewhat concerned”), and 81 percent concerned about a slowdown or recession (43 percent “very concerned” and 38 percent “somewhat concerned”).

● In fact, 71 percent of small business owners are actively preparing for a recession.

Finally, it’s not surprising that most entrepreneurs tend to be optimistic about the outlook for their own business.

After all, it’s hard to be an entrepreneur and to be a pessimist regarding one’s own venture. But that optimism about their own businesses sometimes align with and sometimes strays from small business owners’ views on the broader economy. That’s the current case, according to SBE Council survey. As noted in the following chart, it was found that 61 percent of small business owners are optimistic about their own enterprises, while 71 percent had a poor (38 percent) or only fair (33 percent) outlook for the economy in 2024.

Elected officials and their political appointees need to take these assessments seriously, again, given the primary role that small businesses play in our economy.

Too many elected officials today seem content spending time, resources and political capital attacking and undermining their favorite political targets – from leading U.S. technology or pharmaceutical businesses to immigrants who meet need labor needs and start up businesses. By the way, such political crusades only inflict additional burdens on small businesses that, for example, drive tech and pharmaceutical innovations, seek employees, and generate growth in nearly all other industries thanks to native-born and foreign-born entrepreneurs.

Entrepreneurs, investors and workers that build businesses would be far better served with politics being pushed aside in favor of sound economic policies focused on tax and regulatory relief, advancing free trade, protecting property rights, pushing forward with welcoming immigration reforms, reining in government spending, and sound monetary policy focused exclusively on price stability.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His latest books on the economy are The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist and The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist.

 

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