Research
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Key Findings

Operations, Environment & Expectations

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Small Business Operations: Small business optimism grows, cash flow comfort inches up

Small businesses remain generally optimistic about their current situation.

About two in five (62%) small businesses say their business is in good health, a slight increase from 2021 Q3 (55%) and ten percentage points higher than at the start of the year in 2021 Q1 (52%). Perhaps more telling is the increase in small businesses that currently say their business is in very good health (30% now vs. 20-23% throughout 2021).

Consistent with previous surveys, small businesses that employ more people are more comfortable with their business health. Just over half (53%) of small businesses with fewer than five employees say they are in good health, compared to about three quarters of small businesses with 5-19 employees (75%) and 20-499 employees (74%).

Two thirds (67%) of small business decision makers say they are comfortable with their cash flow. While this is relatively unchanged from last quarter (66%), comfort with cash flow continues to slowly inch upward over the course of the pandemic, increasing from 62% in Q1 2021 and from 55% in July 2020. Across sectors, manufacturers (74%) report the highest comfort level with their cash flow.

Over three in five (64%) small business owners say they have retained the same size staff over the past year, and 18% report increasing their headcount. Larger small businesses are more likely to report increasing their staff over the past year.

62%
of small businesses say their business is in good health.
62%
of small businesses say their business is in good health.
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Small Business Environment: Small businesses' view of national, local economies unchanged

Small businesses are still skeptical about the health of the economy, whether it’s the national or local economy they’re looking at.

Confidence in the U.S. economy is unchanged from last quarter, with about a third (32%) rating it as good. Slightly more (39%) small business owners rate the health of their local economy as good, but this is also statistically unchanged from the previous quarter (42%) when the measure hit a pandemic high.

Compared to the previous quarter, slightly fewer small business decision makers say the level of competition from other smaller or local companies has remained the same (49% in Q4, 55% in Q3), though this change is not significant. Most (55%) small businesses also say the time they’ve spent on compliance remains the same as six months ago, on par with the past year (Q3: 58%, Q2: 57%, Q1: 54%).

55%
of small businesses say the time spent on compliance remains the same as six months ago.
55%
of small businesses say the time spent on compliance remains the same as six months ago.
“Client demand has tripled from this time last year. We talk about how dealing with incoming requests is like trying to take a sip from a fire hose. With our current team past capacity, we recently hired some new staff, which actually has everyone struggling—training and delegating effectively requires its own type of focus and attention. However, we know these challenges will add to our collective strength once we all get past the learning curves.”
Julianne Weiner
COO, Sonic Promos
Gaithersburg, Maryland
A man packing up orders ready for shipping.

Small Business Expectations: Small businesses get hopeful about the coming year

Small business owners are reporting increasing optimism about the coming year and that is reflected in plans to increase hiring and investment.

This quarter, small business owners registered a record-breaking plan to hire workers in the coming year. About two in five (38%) small businesses anticipate increasing their headcount in the next year, an increase from last quarter (28%) and the highest mark for this measure since the SBI launched in 2017.

Meanwhile just under half (48%) now say they plan to retain the same size staff, a drop from 62% who said the same in Q3 2021. A larger share, about half, of medium-sized (51%), larger (52%), and manufacturing small businesses (48%) plan to increase their staffing levels in the upcoming year.

38%
of small businesses anticipate increasing their headcount in the next year.
38%
of small businesses anticipate increasing their headcount in the next year.

Small business expectations for the upcoming year

Small business expectations for the upcoming year, highlighting plans to increase investment and plans to increase staff from Q1 2021 to Q4 2021.

Plans for increasing investment in the next year are up this quarter and are also at the highest level since the inception of the SBI. More small businesses now say they plan to increase investment (42%) in the next year than those who say they plan to invest about as much as they did last year (35%). This is a shift from 2021 Q3 when only 29% of small businesses anticipated investing more in the coming year and nearly half (48%) planned to invest a similar amount. Despite plans to bring on more employees and increase investment, overall expectations for revenue in the next year remain stable. Most (59%) small business owners continue to expect higher revenues in the year ahead, while another 28% expect revenue to remain the same.

59%
of small businesses continue to expect higher revenues in the year ahead.
59%
of small businesses continue to expect higher revenues in the year ahead.