Does Your Business Size Impact Your Optimism?
The path from start-up to successful, steady-state business is filled with milestones as well as potential pitfalls. From wrapping your head around hiring your first employee to securing office space and managing finances, growing a company provides many learning opportunities and requires renewed optimism day in and day out. But does the size of your business impact how optimistic you are about its future?
Capital One's latest Small Business Growth Index found that owners of businesses with $1M-10M in annual revenue are much more optimistic than their lower-revenue peers. In fact, 73 percent of owners of the higher revenue businesses report that business conditions are good or excellent, while just 54 percent of business owners with less than $1M in revenue feel the same way.
When asked what drives their business optimism, both groups agree: business growth, improved business operations and national economic conditions are the top three factors.
Interestingly, building or growing their team is more likely to drive optimism among business owners with $1M-$10M in revenue (41 percent) versus business owners with less than $1M in revenue (35 percent). And facing challenges in hiring and retention would cause more higher revenue business owners to be less optimistic (42 percent) than their lower revenue counterparts (34 percent).
So what's causing the disconnect in optimism between larger and smaller businesses? We dug a little deeper into the Spring 2019 Small Business Growth Index results to find out:
● Recent stock market volatility does not seem to be the cause: most business owners (66 percent) agree that this is not changing their outlook on the future of their business
● Owners of higher revenue businesses are more likely to believe that tariffs and trade wars could be bad for their business, with 46 percent believing they will have a negative impact vs. 33 percent of business owners with lower revenue
● The answer may lie in concerns about a recession in the next 12 months: more than half (53 percent) of business owners with less than $1M in revenue say they're worried a recession will impact their business, while 44 percent of business owners with $1M-$10M in revenue report having concerns
Whether growing their business is a priority or not, it's important for business owners to examine their outlook and how it may be impacting their decision-making. And if growing a business is top of mind, they just might find themselves becoming more and more optimistic along the way.