Methodology

SURVEY MAKEUP OF
1,000 RESPONDENTS

Regional breakdown

INDUSTRY BREAKDOWN

COMPANY SIZE BREAKDOWN

SURVEY METHODOLOGY

These are findings from an Ipsos poll conducted September 18, 2017, to October 16, 2017, via telephone in English. For the survey, a sample of 1,000 small business owners and operators was sourced from the continental U.S., Alaska, and Hawaii.

Small businesses are defined in this study as companies with fewer than 500 employees that are not sole proprietorships. The sample for this study is a listed business directory of all U.S. businesses obtained through Dun & Bradstreet. Ipsos used fixed sample targets, unique to this study, in drawing the sample. This sample calibrates respondent characteristics to be representative of the U.S. small business population using standard procedures such as raking-ratio adjustments. The source of these population targets is the U.S. Census 2014 Statistics of U.S. Businesses dataset. The sample drawn for this study reflects fixed sample targets on firmographics. Post hoc weights were made to the population characteristics on region, industry sector, and size of business.

All sample surveys and polls may be subject to other sources of error, including, but not limited to, coverage error and measurement error. The poll has a margin of error of plus or minus 3.5 percentage points for all respondents. Ipsos calculates a design effect (DEFF) for each study based on the variation of the weights, following the formula of Kish (1965). This study had a confidence interval adjusted for design effect of the following: (n=1,000, DEFF=1.5) adjusted confidence interval=+/-5 percentage points. Where figures do not sum to 100, this is due to the effects of rounding.

INDEX METHODOLOGY

To construct national, regional, and employee size, and broad industry group level estimates of the health of small businesses in the U.S., a sequence of statistical techniques was applied to the survey results, including elastic net for variable selection and multilevel regression with post stratification (MRP) from the survey data.

Since each business may report the state of its health by different standards, Ipsos uses the core survey questions to construct a stable, consistent definition of small business status. Each business is then classified into one of three categories: poor, neutral, or good. Once each business is measured on a consistent scale, the survey results are fed into a multilevel regression model to generalize our results to a broader set of businesses enabling us to measure the health of businesses not just nationally but also at the level of state, industry, and business size. The model uses employee size, industry type, and location as individual level predictors, as well as data from the U.S. Bureau of Labor Statistics on job change by industry.

Next, to ensure that our model results are reflective of the small business population in the U.S., we adjust our estimates using the number of businesses in the over 5,000 possible combinations of state, industry, and firm-size categories to ensure that the model of business health represents the U.S. population of small businesses.

For the regional-level estimate specifically, the current quarter information also references the data from the previous two quarters to better stabilize the current quarter estimate.

The process used is known as post stratification, something that was not possible with the original sample due to sample-size limitations. The population estimates for employee size, industry, and location were obtained from the 2014 Census Survey of U.S. Businesses.

View Full Q4 Survey Data Findings

CORE INDEX QUESTIONS:

Small Business Operations

  • 1. How would you rate the overall health of your business?
  • 2. Over the past year, would you say you have increased staff, retained the same size staff, or reduced staff?
  • 3. How comfortable are you with your company’s current cash flow situation?

Small Business Environment

  • 4. How would you rate the overall health of the U.S. economy?
  • 5. How would you rate the overall health of the economy in your local area?
  • 6. Compared to six months ago, does your business see more competition, less competition, or about the same level of competition from smaller or local companies?
  • 7. Compared to six months ago, has the time or resources you spend completing licensing, compliance, or other government requirements increased, decreased, or stayed the same?

Small Business Expectations

  • 8. In the next year, do you anticipate increasing staff, retaining the same size staff, or reducing staff?
  • 9. For the upcoming year, do you plan to increase investment, invest about as much in the business as you did last year or reduce investment?
  • 10. Looking forward one year, do you expect next year’s revenues to increase, decrease, or stay the same?

2017 CORE INDEX TRENDS

The infographic below charts responses—in percentages—to each of the Index’s 10 core questions and will provide insights into the changing attitudes and expectations of small business owners over time. This infographic reflects responses to the first three surveys, Q2, Q3, and Q4 of 2017. Responses to the 10 core questions are used to calculate the MetLife & U.S. Chamber of Commerce Small Business Index number, which currently stands at 63.2—meaning 63.2% of small business owners have a positive outlook for their companies and the environment in which they operate.