Despite a Changing Economy, Recession Concerns, Small Business Owners Remain Confident | 2019

Fluctuations in the stock market have not changed the outlook of most small business owners. (Coming off its worst quarterly performance since 2011, the S&P 500 rebounded 13.1% in Q1 for its best quarterly performance in ten years.) However, some owners are concerned a recession will impact the success of their business in the next 12 months. These are some of the findings of Capital One’s latest Small Business Growth Index, a biannual survey of 500 small business owners measuring their sentiment related to the economy, business conditions and plans for growth.


66% | Percentage of small business owners participating in the survey who say recent fluctuations in the stock market have not changed their business outlook
49% | Are concerned that a recession could impact the overall success of their company during the next year.


“While we saw a slight dip in optimism compared to Fall 2018, small business owners are still making strategic investments in their businesses, while paying close attention to the uncertainty in the stock market and evaluating the potential impact of a recession,” said Jenn Flynn, head of small business bank at Capital One.”

Following are key themes uncovered by the Spring 2019 Small Business Growth Index:

Small business owners think stock market volatility will impact their business, but many have yet to feel the effect.

49% | Percentage of owners who are (or will be) more conservative on inventory or supply management due to stock market volatility
34% | Percentage who say stock market volatility may impact their ability to expand and grow their business
27% | Say they are not (or may not be) able to hire new employees
40% | percent of SBOs report an increase in sales over the past six months.
59% | Say they believe conditions are good or excellent (down from 67 percent in October 2018)

For some owners, a tight labor market is impacting their ability to hire. Many of those who plan to hire are competing for talent with their pocketbooks.

29%| Plan to hire in the next six months, down from 33 percent in Fall 2018
29% | Do not plan to hire, percent say they would like to but are nervous to take on the added expense due to economic conditions
28% | Percentage who say they cannot find the right talent
24% | Say they don’t have the financial resources to hire
76% | Among those who plan on hiring in the next months, the percentage who say they are providing industry-leading or competitive salaries
47% | The percentage who say they are providing more benefits to employees
43% | The percentage who say they are marketing their business as a great place to work
35% | Among those who plan on hiring in the next months, the percentage investing in differentiated or modern office perk
29% | Among those who plan on hiring in the next months, the percentage who say are providing an option for flexible work environments
34% | Among those who plan on hiring in the next months, the percentage that has leveraged the gig economy for their business

Half of the respondents feel the tax plan has been generally positive for small businesses, yet many feel they will actually pay about the same in taxes

51% | Percentage who say the tax plan has been positive for small business.
57% | Percentage of male business owners say the plan has been positive for small business
41% | Percentage of female business owners who say the plan has been positive for small business
54% | Percentage of business owners who think they will pay about the same in taxes this year


23% | Percentage of all small business owners who feel pressure to change aspects of their business, like customer experience or innovation driven by large companies.

“Change is a constant for small business owners, and it’s encouraging to see leaders remain resilient as they interpret new things like tax reform and the impact of technology,” said Brad Jiulianti, head of small business card at Capital One.


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