Confidence Powers Small Business Owners in 2019

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Covering Cash Flow Shortfalls and Creating Growth Plans Offer Best Opportunities

Small business owner optimism continues to shape business plans in 2019. Encouraged by the high level of confidence of small business owners, businesses that want to grow need to create and share growth plans. Small business owners can limit cash shortfalls by building cash reserves and better managing cash flow to protect their ownership interests.

Small businesses look forward with confidence


Optimism stays high for small business owners

%of small business owners saying they are extremely to somewhat confident in

US economy

  • 55%

  • 64%

  • 65%

Local economy

  • 58%

  • 63%

  • 68%

Industry

  • 60%

  • 66%

  • 65%

While high confidence correlates with a lower level of stress, small business owners are still looking for more revenue and ways to better manage the profitability and cash flow of their businesses.


Stress declines for small business owners

%of small business owners saying they are extremely to somewhat stressed

2017

2018

2019


Top factors contributing to stress

%of small business owners who are stressed citing this concern

35%

Revenue too low

32%

Economic uncertainty

31%

Challenges to increasing profits

30%

Rising costs

29%

Managing cash flow

Growth is the goal

Confidence in the economy and increased feelings of financial well-being keep small businesses focused on growth in 2019. Top growth strategies include marketing to profitable niches and developing a strong digital and social media presence.


38%

of small business owners say that growth is their top priority

Small business owners are taking action to find growth

%of small business owners taking these actions to fuel growth

  • Marketing more to profitable niches
  • Developing a stronger digital/social media presence
  • Developing new products
  • Improving speed, efficiency and internal processes
42%
36%
29%
24%

Half of companies miss the opportunities a growth plan can bring

Most small businesses don’t have the clear, succinct growth plan they need. Of those who do, few have shared plans with employees, partners, advisors, friends, suppliers, etc., who can help them reach their goals.


Fastest-growing companies*

1.5x

more likely to have a
publicly-shared growth plan


2x

more likely to share
with 15+ people

When created, growth plans are not being shared

%of small business owners

49%

Create a clear, succinct growth plan

13%

Shared a growth plan publicly

Cash flow pressures continue to challenge small businesses

Increasing small business owner confidence and appetite for company growth require businesses to use cash more efficiently. Cash fluctuations and shortfalls, combined with rising costs, make improving cash flow management a high priority for small business owners in 2019.


37%

of small business experienced
a cash crisis

Covering a cash crisis

%of small business owners who experienced a cash crisis cited these actions to find cash for the business

  • Add owner’s personal cash
  • Access a business line of credit
  • Use business cash reserves
  • Stop payment of owner salary
  • Take out personal loans
36%
26%
26%
25%
19%

75%

of small business experienced
cash flow fluctuations

Relieving cash flow pressure: top ways to deal with rising costs

Top actions cited by small business owners

  • #1 Increasing pricing and perceived value of products to keep pace with inflation
  • #2 Identifying and reducing overhead costs
  • #3 Negotiating lower prices to avoid rising costs and protect margins
  • #4 Investing in new technology
  • #5 Improving staff productivity with better supervision and management

Small business owners make personal sacrifices to make their companies successful

Small business owners are often the primary source of financial resources for their businesses, whether providing investment funds for growth or backup reserves to cover cash shortfalls. Many small business owners find themselves compromising personal financial goals or lifestyle choices to keep their businesses going.


Personal tradeoffs for the business

%of small business owners saying that they have

  • Not saved enough for retirement
  • Reduced annual cash flow
  • Not purchased an expensive vehicle
  • Not purchased “luxury” items
  • Skipped or chose more modest vacations
  • Not been able to support charities
28%
26%
26%
25%
22%
21%

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For tips and advice to help you manage your business cash flow with confidence and develop a strong growth plan, check out more small business best practices and visit your Banker.

Source: Q1 2019 SunTrust nationwide survey of 515 small business owners with annual revenues between $100,000 and $5 million.
* Fastest-growing companies are the 29 percent of companies surveyed that experienced the largest revenue growth.
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