More small business owners say business conditions are good or excellent today than at any point in years, according to the latest Citibank® Small Business Pulse released today. Nearly half of small business owners (48%) rate conditions as good or excellent, up from 43% in May 2012 and twice the rate three years ago (24%). Current confidence also represents a rebound from August 2012, when the fiscal cliff caused uncertainty.
Meanwhile, those that say conditions are poor dropped to 14%, the lowest level since the Citibank® Small Business Pulse began in 2010. Half of small business owners say they expect annual sales to grow in 2013, with one-third saying they will grow by more than 10%. In addition, more than half (54%) expect an even stronger 2014.
“The rise in those that have a favorable view of current business conditions is unmistakable,” said Jerome Byers, head of Citibank Small Business. “While about half still fault sales for preventing them from achieving business goals, just as many business owners project improved sales this year and next. In recent years, as conditions have improved and small businesses have looked to grow, we have sought to be there for them – our small business lending has grown annually, from $4.5 billion in 2009 to $9.6 billion last year.”
IMPROVED OUTLOOK COINCIDES WITH PLANS FOR GROWTHWith the change in outlook, 26% of business owners say they will hire full-time employees in the next 12 months, significantly higher than found in most Citi Pulse surveys conducted over the past three years (15% in Summer 2012 and 17% in Summers 2011 and 2010). Only 5% of all respondents are considering a staff reduction. Meanwhile, 13% say they are looking to add a new location. Among those companies, 25% intend to grow internationally to either an emerging or a major international market. Eighty-one percent see a new geographical market as a sales solution or business opportunity that does not exist in the current market. Among companies not expanding, 26% say they do not have the right staff to manage expansion. Aiding owners’ interest in growth, their fears about cash and budgets have eased – 59% are achieving or making progress toward maintaining their cash flow, compared to the 50% who had reported facing a cash crunch by the summer of 2012. Owners are also focusing on reducing debt – 39% are paying off debt while another 22% are making progress toward a full payoff.