Survey Says: The State of Small Businesses

Although last week was Small Business Week, we honor small business owners every day. Here are the results of several studies about small business owners and entrepreneurs.

Small Businesses Remain Confident

Survey: Capital One Business/Next Gen Small Business Confidence

From: Capital One Business & Capital One Insights Center, in partnership with Morning Consult and the NextGen Chamber of Commerce

Despite facing a range of challenges, including rising inflation and the ongoing impact of the COVID pandemic, small business owners remain optimistic and motivated to grow their businesses, according to a new Capital One Business/NextGen survey/

Key findings

• 90% of small business owners are confident their companies will still be operating in the next six months. Despite this, only 43% say business conditions in their area are either excellent or good.
• Small business owners faced a variety of challenges this past year, with inflation (48%) reported as the biggest one, and 77% are concerned about inflation’s future negative impact
• 76% are confident they will be able to fill open positions in the next six months. To attract and retain new talent, small business owners who changed their hiring practices now more commonly offer more competitive wages (16%). Millennial small business owners (47%) are more likely to increase their employees’ wages than other small business owners (36%).
• 42% say they have experienced burnout in the past month, with 24% saying they are currently experiencing burnout
• 23% are still mainly focused on profit growth
• 88% say technology helps them run their business better and more cost-effectively
• 77% used their savings to start, and 50% used their savings to expand their businesses

 

Failing to Plan for the Long Term

Survey: 2022 Business Owner Perspectives Study

From: Mass Mutual

Key findings

Workplace issues

• Of the small businesses that survived the pandemic, only 36% are experiencing growth, and 46% report lower-than-expected revenue
• 69% say their biggest long-term concern is keeping key employees loyal to the business
  • 43% are facing workforce and staffing issues, specifically in maintaining employee productivity and morale and hiring in a competitive market
  • To better compete in the labor market, small business owners have offered increased wages (42%), more flexibility (41%), and bonuses (36%) to hire and retain employees
• 39% are facing supply chain issues, such as rising costs and increased shipping time

Retirement plans

• 46% of small business owners plan to retire within the next decade; however, only 35% have begun creating a succession plan
• 49% say they want to keep the business in their families, yet only 33% have identified successors
• 3 in 5 would exit the business sooner if their future financial security were assured. 
• 46% have invested in a qualified retirement savings plan, but 54% feel they should be saving even more.
• 44% have had a business assessment performed in the last three years; however, most have deprioritized three critical valuation factors:

1. Knowing if the business will be a sufficient component of their retirement income plans
2. Creating an equitable distribution of the owner’s assets as part of an estate plan
3. Establishing a buy-sell agreement between partners—only 32% of those surveyed have one in place

 

Top Small Business Cities in America

Survey: Best Small Business Cities in the U.S.

From: Biz2Credit

Do you know the way to San Jose? If you don’t, as a business owner, you might want to check your GPS and find out since the northern California city was named the Best Small Business City in America by Biz2Credit, based on factors such as average annual 2021 revenues, credit scores, age of business, and Biz2Credit’s proprietary BizAnalyzer score.

The rest of the top 10 cities were: Baltimore, New York, Boston, San Francisco, Los Angeles, Washington, DC, Portland OR, Providence RI, and Denver.

The full report has tons more detail, including all the top 25 cities, the best cities ranked by credit score, annual revenue, etc.

 

Optimism Rules

Survey: 2022 Small Business Forecast

From: HelloSign

Read more on their blog

Key findings

• 57% of SMB owners and leaders say their net business outlook is optimistic—yet 35% of SMBs’ top goal is to stabilize their businesses, overcome previous losses, and increase profitability within the next year
• SMBs are refocusing tech investments on operations to unlock productivity gains, with 36% listing “increased productivity” as the top motivation
• 40% list threat detection as the top security practice they plan to implement this year
• Talent shortages remain a concern with SMBs doubling down on hybrid and flexible working options: 23% of employees cite flexible working arrangements as a top priority and strategy for attracting and retaining employment.

 

Meet Less, Accomplish More

Survey: Future of Work

From: Verizon

During the pandemic, instead of coming up with new workflow options, many businesses just virtually replicated their old way of working. Verizon’s Future of Work white paper, Meet Less, Accomplish More, reveals lessons learned in recent years about how companies can improve workplace productivity through their meeting processes. 

The study shows that today’s new hybrid work models mainly focus on employees working in person or remotely instead of directly addressing issues that have arisen from hybrid work: overscheduled calendars, meeting fatigue, and more.

The white paper asks, “What if small changes could make a huge difference in efficiency, productivity, and employee satisfaction?

Key findings

• At least 25% of meetings didn’t need to happen
• 90% of participants say they feel more comfortable working through asynchronous modes, such as email, Slack, and shared documents
• 83% say the new ways of managing meetings helped improve overall meeting effectiveness
• 78% report they’re wasting less time sitting in meetings where their live participation isn’t required

 

Many Small Businesses are “Cash Rich”

Survey: Small Business Health Index

From: Ocrolus

The Ocrolus Small Business Health Index is issued quarterly reporting on the current level of financial security for small businesses, including factors such as lending trends, cash balances, and credit quality for the sector. The first-quarter report for 2022 is in

Key findings

• Small business credit application volume increased by 28% from December 2019 to December 2021
• Across Ocrolus customers, small businesses are sitting on average daily balances almost 80% greater than 2019 levels at the time of application for new credit
• Geographically, Texas, Arizona, Utah, and Idaho are the only U.S. states that have recovered all the jobs they lost at the start of the pandemic.

 

Small Businesses Want a Level Playing Field

Survey: Opinion Poll

From: Small Business Majority

According to a recent poll from Small Business Majority, most small business owners seek a more equitable playing field with larger competitors, particularly on digital platforms and in the area of contracts and agreements.

Key findings

• Small businesses want a more equitable playing field with their larger competitors: 83% say larger companies have the resources to drown small businesses out with their market power
• Small businesses increasingly rely on online platforms for their businesses: 30% use Facebook’s marketplace as part of their marketing strategy
• Standard big business practices are hurting smaller firms: 35% say they had been affected by self-preferencing, while 55% believe that it’s an issue; 34% said they had been negatively affected by predatory pricing, while 55% think it’s an issue
• Small businesses are impacted by unfair agreements and terms with large companies: 41% say they had been negatively affected by differential pricing based on their size

The Small Business Majority says, “Bipartisan legislation such as the American Innovation and Choice Online Act exemplifies the strong measures needed to address monopolization holding our nation’s job creators and innovators back.”

 

Your Employees are Stressed Out

Survey: Mental Health of American Workers

From: JobSage

The past two years have taken a toll on Americans’ mental health—especially at work, according to a survey from JobSage. And they wondered if businesses were doing enough to support their employees.

Key findings

• 28% of American workers have quit a job because of their mental health in the last 2 years. Another 20% have considered doing so.
• 42% said finances had the worst impact on their mental health, while 2 in 5 reported work weighed the heaviest on their minds.
• Top causes for work-related stress: 1. Being overworked 2. Lack of work-life balance 3. Inadequate compensation.
• What employees want from their employers: 1. Better work-life balance 2. More time off 3. Greater schedule flexibility.
• Of those with mental health benefits, 86% use the services offered.
• 77% of respondents have taken a mental health day at work. However, 66% felt guilty doing so.

 

Maintaining Work/Life Balance

Survey: Work/Life Balance by Generations

From: CommercialCafe

Maintaining work/life balance is the Holy Grail for some Americans, while others think they’ve achieved it. CommercialCafe surveyed thousands of employees from four different generations to gauge how they perceived their work/life balance.

Key findings

• 77% of baby boomers and about 60% of millennials and Gen Xers are satisfied with their current work-life balance, but only 50% of Gen Zers would say the same
• 41% of Gen Zers say their work-life balance has gotten worse since the pandemic started. Around 40% of millennials, Gen Xers, and baby boomers say it’s improved
• About 70% of Gen Xers and millennials think being able to work from home is beneficial to their work/life balance
• Millennials (45%) and boomers (46%)—the generations more likely to have children—would take lower pay for more flexible hours, while 70% of Gen Zers would not
• 41% of all respondents say workplace stress affects their personal lives to some extent. The most popular de-stressors include watching TV/Netflix and family time.
• Although 63% of Gen Zers get at least 7 hours of sleep per night, 52% still feel tired

 

Is Hybrid the Future of Work for IT Teams?

Survey: Challenges of SMB IT Teams

From: GoTo

According to a survey from GoTo and Frost & Sullivan, today’s workers expect greater flexibility from their employers. But IT teams must re-evaluate the tools they need to meet these flexible work demands while balancing an increased and complex workload.

Key Findings

The study found hybrid and remote work models can lead to more productivity and positive impacts on company culture but can also often result in complexities for IT, especially when SMBs lack the right tools and resources.

• 76% of respondents say the workload of IT workers has increased due to the adoption of flexible work models
• 43% agree IT jobs have become more difficult.
• 95% of companies have plans to consolidate their tools in 2022
• Nearly 80% of SMBs increased their IT budgets in 2021 (vs. 2020)
• 77% of companies increased their 2022 IT budgets over 2021

Additional Survey Findings that Demonstrate Hybrid is Worth the Investment:

• Employees demand hybrid work: Staff turnover is significantly lower in a hybrid model (22%) than in completely remote work models (43%) and work in-office models (44%)
• Hybrid means more productivity: 78% say hybrid/remote work positively impacts employee productivity, and 77% say it has a very positive impact on company culture
• Flexibility is key: 16% of top management with a fully remote work policy would prefer to move to a hybrid model. Of the leaders with an in-office work policy, 23% would prefer a hybrid or fully remote model.
• In-office requirements are not needed: 78% of hybrid companies which have guidelines on how many days in the office are required (an average of 2.7 days a week) net out to about the same as those without mandatory days in the office (2.5 days a week)
• Making IT work: IT department workload increased 76% in 2021 versus 2020, and the main reasons were: more challenges related to flexible work (49%), more tasks to perform (44%), increased pressure (41%), and software underperforming/wrong tools (31%)

 

Gen Z in the Workplace

Survey: Gen Z in the Workplace

From:  TalentLMS & BambooHR

A new survey of Gen Z workers reveals that mental health and work-life balance are their major concerns.

Key findings

• 53% of U.S. employees aged 19 to 25 plan to stay at the same company over the next year
• Of those thinking of quitting, 42% cited burnout and a lack of work/life balance as one of the top reasons
• 45% of Gen Zers prefer a hybrid work model
• 81% find it important to have flexibility in when and where they work.
• 77% say it’s important to work for a company that cares about DE&I
• 76% define a great place to work as one with caring, friendly, and socially conscious people. Empathy, honesty, and the ability to listen are the top traits they value in managers.

 

Is BYOD a Good Workplace Policy?

Survey: Maximizing Mobile Value

From:  Samsung and Oxford Economics

As offices are reopening across the country, many businesses are reconsidering their approach to mobile technology. A new white paper from Samsung and Oxford Economics explores BYOD (bring your own device) vs. EPD (employer-provided device) policies among SMBs.

Key findings

• “Essential?”: While smartphones are viewed as essential to productivity, only 15% of businesses surveyed provide phones to all employees. The rest have either implemented a BYOD policy (39%) or a hybrid approach (46%), where some employees receive phones and others don’t.
• Behind the curve: 34% of BYOD companies believe they are lagging in mobile maturity—more than 3X the rate for businesses that issue smartphones to some or all employees.
• Security risks: BYOD companies are leaving mobile data and apps unprotected: just 40% of them have mobile device management (MDM) tools in place, meaning 60% of BYOD businesses are at greater risk from security threats. By comparison, only 7% of EPD businesses don’t have MDM in place, with 93% of EPD companies having fortified their cyber defenses in this way.
• Better retention: EPD companies tend to see less employee turnover—51% of EPD companies have a turnover rate below 10%, compared to 37% of BYOD organizations.
• Powering productivity: 44% of respondents say smartphones allow them to access apps and complete tasks that cannot be completed on a PC. EPD companies deploy more business apps than BYOD companies.
• Attracting new hires:  35% of employees say receiving a high-end smartphone from a prospective employer would make joining that company more attractive.
• Staying protected: Employees required to install an MDM client on their phones are more likely to use passwords of more than eight characters (72% vs. 62% others) and change more than one character when creating a new password (47% vs. 37% others).
• Putting phones first: EPD companies are more likely than BYOD businesses to have a “mobile-first” mindset and consider eliminating PCs in favor of smartphones that can power a desktop computing experience (66% for EPD vs. 39% for BYOD).

Small business stock image by Monkey Business Images/Shutterstock