According to Capital One's latest Spark Business Barometer, tracking 400 small business owners’ financial conditions, economic perceptions, hiring plans and other indicators of small business growth, small business owners are preparing for weaker sales this holiday season, with only 23% expecting an increase in sales, down from 29% a year ago. A national study of small businesses revealed smaller businesses (with under $1 million in annual revenues) are driving the negative outlook, feeling less optimistic about holiday sales compared to their larger counterparts and competitors.
Although technological advancements provide significant opportunity for small businesses, only 25% of respondents cited keeping up with technology as their top business concern for the coming year. The study also found that more than three-quarters (77%) of SBOs with websites had not yet set them up for e-commerce capabilities and three-quarters of SBOs are not currently offering mobile payments options to their customers.
Despite the dip in holiday sales expectations, small business sentiment overall seems to be improving, says the report. 49% of business owners reported "good" or "excellent" business conditions in their area heading into 2017, an increase of eight points compared to the first half of 2016 (41%) and slightly above average (48%) since the Barometer began tracking business conditions in 2013. 12% of small business owners believe their financial position will be "much better" in the next six months - up three points from earlier this year.
Buck Stinson, Head of Small Business Card at Capital One, notes that "… many businesses are improving their outlook about the future, after a brief dip in confidence earlier this year. While concerns related to costs and regulations still exist… optimism is on the rise,"
Additional highlights uncovered in the fall 2016 Spark Business Barometer survey:
According to the study, the top three concerns of small business owners in the coming year include:
Only 23% of small business owners plan to hire new employees in the next six months – slightly down from earlier this year (26%) but up from 20% a year ago. Industries with the highest growth expectations in 2017 include construction (45%), transportation (30%), and finance (29%).
Business owners are not fully capitalizing on marketing and e-commerce opportunities, says the report:
For more information about the Capital One report, please visit here.