Posted on Tuesday, February 04, 2020Blog written by Rob Swenson
Here’s some encouraging news to help settle further into 2020: Small businesses appear to be more optimistic than ever. Generally, they have strong, positive outlooks about their local economies and the health of their businesses.
And businesses in the Midwestern region, which includes South Dakota, are the most upbeat of all.
Those are among the noteworthy takeaways in the Small Business Index: The Voices of Small Business Owners for the final quarter of 2019. The Index is a survey of business attitudes published by the U.S. Chamber of Commerce, a prominent business-advocacy organization, and MetLife, a financial services company that does business around the world.
The two organizations combine forces every quarter to survey small business owners across the United States. Their objective is to get a read on the health of small businesses. As defined for the study, small businesses are enterprises with fewer than 500 employees that are not sole proprietorships.
For the nation as a whole, the Small Business Index for the fourth quarter reached an impressively positive score of 71.3. That’s a new high for the survey, which began in 2017. It was up 0.6 from the prior quarter.
The survey was conducted by phone between Sept. 27 and Oct. 25. Some of the other highlights from business owners who responded to the survey include:
- 59 percent said their local economic outlook is good. That’s the most optimistic businesses have felt toward their local economy since the survey began.
- 57 percent feel the national economy is in good health. That continues a trend from the first half of the year and marks a full year of optimism by a majority of small businesses.
- Small businesses in the Midwest are the most likely among regions to report good overall health, comfort in cash flow, and a good national economy. The region’s overall index score was 71.7.
The survey divides the nation into four regions: South, West, Midwest, and Northeast. In addition to South Dakota, the Midwest includes Minnesota, Iowa, North Dakota, Nebraska, Kansas, Wisconsin, Illinois, Indiana, Ohio, and Michigan.
For companies in high-tech businesses, including SDN Communications, business attitudes about adopting technology are especially interesting.
The survey found that small businesses are more inclined to use standard technologies that support daily operational functions (computer accounting systems, for example) rather than technologies that are perceived as less essential to day-to-day business (such as cloud computing or big-data analysis).
A majority of small businesses (54%) express concern about cybersecurity, and half of them (50%) agree that data privacy issues present a challenge.
“Small businesses identify cost as, by far, the biggest factor keeping them back from adopting new technologies,” according to the report.
Some secondary findings in the survey are interesting, too. For example, Facebook is by far the most widely used social media platform among small businesses, followed by Instagram and LinkedIn. Not surprisingly, perhaps, retailers lead their peers in manufacturing, services and professional services in adopting social media management tools and email marketing tools.
The biggest cause for concern in the survey results might be growing worries in the manufacturing sector. Manufacturers’ outlook has dropped 11 points during the past two quarters. Hopefully, 2020 will bring the industry more reasons for optimism.
The health and outlook for the entire small-business community are immensely important to the well-being of regional and U.S. economies.
The U.S. Small Business administration has called small businesses the lifeblood of the U.S. economy. The agency credits them for creating about two-thirds of all the new jobs in the United States.
We thank the U.S. Chamber and MetLife for providing insights into the business-owners’ attitudes. If you’d like to check out the survey for more details, visit the Small Business Index for 2019 Q4.
SDN Communications is a leader in providing business internet, private networking and cloud connectivity to businesses and organizations in communities such as Sioux Falls, Rapid City, Worthington, and the surrounding areas.