Small Business Update: Are entrepreneurs confident heading into 2024?

Tom Sullivan joins ASBN for a new Small Business Update, this time to discuss how entrepreneurs are feeling heading into 2024.

Small business confidence is a key indicator of economic performance, as it provides a frontline view of the market otherwise invisible to the naked eye. Recently, the U.S. Chamber of Commerce and MetLife released their Q4 Small Business Index, which revealed a sudden drop in optimism among entrepreneurs after a comparatively strong summer. To learn about the factors behind this shift and other details in the report, host Jim Fitzpatrick is once again joined by Tom Sullivan, vice president of small business policy at the U.S. Chamber of Commerce, for another Small Business Update.

Key Takeaways

1. Sullivan notes that there is a disconnect between how small business owners view their own prospects and how they view the economy’s prospects. While entrepreneurs tended to feel more optimistic about their company’s future in the Chamber of Commerce’s research, their expectations for the economy were largely pessimistic.

2. Sullivan notes that the eight-point dip in small business confidence between Q3 and Q4 was likely the result of economic pessimism taking a toll on the overall hopes of entrepreneurs.

3. Even though small business confidence trended lower in Q4, Sullivan notes that many entrepreneurs are expecting to earn more revenue next year and are planning to hire more employees as a result.

4. Unfortunately, higher revenues do not always translate to higher profits, especially during periods of high inflation. Q4 was the sixth quarter in a row that inflation ranked as the top factor impacting small business confidence.

5. Sullivan notes that small business owners are actually in a better position to recruit talented professionals than larger companies. This is because smaller organizations have the ability to provide more flexible work schedules and job environments, factors that can be especially attractive to younger professionals.

6. Several holiday shopping trends emerged in the small business confidence report. Although foot traffic during the holidays declined, online shopping grew dramatically, reaching the highest level in the history of the U.S. Sullivan urges entrepreneurs to visit the Chamber of Commerce’s digital platform CO to gain in-depth knowledge of online sales strategy.

"A lot is going to depend on whether small businesses can find and hire good employees. If they are able to do that, then we're gonna have a soft landing that leads into boom time [for the economy] as far as the eye can see, but that's a big if." — Tom Sullivan

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