February 10, 2020
By: Caity Witucki
Contributing Editor, Main Street Monday
Main Street Monday – Small Business Owner Optimism Dips but Remails Strong
According to the Wells Fargo/Gallup Small Business Index, small business owner optimism softened slightly in Q1 of FY 2020. However, Small business owners remain upbeat about their companies’ outlook and many report plans to expand and entice new customers by increasing their internet presence.
The Small Business Index reports that business owners’ present and future optimism saw a modest decline, down 10 points from +142 which was recorded at the end of Q4, 2019. Nevertheless, the current score of +132 matches the trend we saw in Q2 2019 ( +129) and Q3 2019 (+136).
The Wells Fargo/ Gallup Small Business Index measures small-business owners’ attitudes about a wide variety of factors affecting their businesses. “ The latest decline is fueled mainly by owners’ reports of a lower hiring rate and a decreased anticipation of hiring more employees in 2020,” says Sr. Gallup Analyst, Frank Newport. “Most other measures of financial health measured by the index remain stable and quite positive.”
In addition to reporting their optimism levels, poll participants were asked to cite the top challenge facing their businesses. In line with other recent survey results, small business owners said that they expect to continue to have difficulty attracting customers and new business. Participants in this quarter’s poll also reported technology-based concerns, especially with computer updates and cybersecurity.
When asked an open-ended question about what they plan to do to attract and retain customers, small business owners were most likely to mention activities involving marketing (36%), with 24% specifically saying that they plan to increase online and digital advertising to build more name recognition. Owners also cited their plans for focusing on customer service and retention (13%), expanding the products and services that they offer (9%), and adjusting pricing (6%).
Of those businesses that already focus on customer involvement via online customer feedback and reviews, 69% said such reviews were extremely important to their businesses, a distinction that could become increasingly important in differentiating a successful from an unsuccessful business.