Small business owners in Southeast hit
particularly hard with higher stress and more concerned with
inflation, yet still confident in growth outlook
CHARLOTTE, N.C., May 1, 2024
/PRNewswire/ -- Following another year of inflation and economic
uncertainty, small business owners are focused on short-term
challenges to stay afloat while putting long-term strategy and
planning on hold, according to Truist's annual Small Business Pulse
Survey1. While reporting higher levels of stress than in
previous years, they're optimistic about growth in 2024 and expect
their business conditions to improve.
"In recent years, our survey has shown the impact that economic
uncertainty and high levels of stress can have on small business
owners regionally and nationally, but it has also shown the
resiliency of the small businesses that serve our communities each
and every day," said Scott
Stearsman, head of small business banking at Truist.
"Running a small business is no small feat, which is why at Truist
we're focused on caring for our small business owners so they can
continue doing what they do best."
Businesses have ambitious goals, struggle with long-term
strategy due to short-term challenges
Despite the
optimistic outlook and growth goals for the future, most small
business owners have been too occupied with managing short term
challenges to prioritize business planning, with only 35% reporting
having a formal growth plan in place. Of that small group, very few
have shared their plan with anyone outside of the business, with
just 32% saying their plans have been shared with business advisors
like CPAs, bankers, or lawyers.
Without formal plans in place, small business owners may not be
able to address key business skills where they know improvements
are needed, such as prospecting (50%) and generating referrals
(43%). At the same time, they feel unprepared to handle unexpected
events—just 42% believe they are prepared to manage an economic
downturn, and only 41% say they are ready to handle a natural
disaster. Concerns about preparedness for these unplanned
challenges are understandable when considering that small business
owners are already cash strapped, reporting having an average of
just 4.26 months of reserves on hand.
"Running a business takes planning, research, funding and is a
huge commitment of time," said Stearsman. "When small business
owners look to the future, having a trusted financial partner that
understands their goals and business plan can help them through the
challenges and opportunities ahead."
Challenges remain but business sentiment showing signs of
improvement
Similar to prior years, financial concerns
remain top-of-mind for small business owners with rising costs
(43%), inflation (41%), economic uncertainty (31%), and finding new
customers (31%) at the forefront. As a result, small businesses
have had to make tough choices, including:
- Raising prices (50%)
- Cutting nonessential spending (45%)
- Accepting lower profitability (34%)
Alongside these economic challenges, small business owners are
concerned about their ability to attract and maintain talent, with
31% reporting that both competing with larger companies for people
and providing healthcare benefits are a major concern, followed by
demands for higher pay and retention to keep the right staff (both
27%).
In response, 78% of small business owners report taking action
to retain employees, including:
- Increasing wages (45%)
- Offering work from home/remote work options (20%)
- Providing additional paid time off/holidays (19%)
Between small business owners taking actionable steps and
inflation beginning to cool, 55% of small business owners report
that they're feeling somewhat or much better about their financial
well-being compared to a year ago and are expressing increased
optimism around business growth conditions for the coming year
with:
- 53% of small business owners believing conditions have
significantly/somewhat improved since a year ago, and
- 62% of small business owners expecting conditions to improve
significantly/somewhat for the upcoming year.
Prioritizing their businesses has impacted small business
owners' own well-being
It's clear that small business owners
are trying to pursue growth strategies but often suffer as a
result. When asked how they handle cash shortfalls, 50% of small
business owners have reduced their own salaries. Additionally, only
48% of small business owners reported having a perfect or good
work-life balance, compared to 61% of respondents last year, and
more than half (57%) reported being somewhat or extremely stressed.
That is only 1% less than in 2021 – during the global pandemic –
when stress was at an all-time high.
With this increased stress, small business owners reported
increased anxiety (45%), insomnia/trouble sleeping (30%), and
spending less time on self-care (29%) as some of the negative
outcomes they were facing. On a positive note, they also reported
they were actively setting goals to achieve a better-balanced life
by scheduling personal time (43%), setting specific work/life
balance goals for themselves (39%), and creating work boundaries or
setting times to be unavailable (37%).
Key Southeastern markets show higher levels of
stress
As small business owners across the nation are
experiencing higher levels of stress than previous years, key
Southeastern Markets (Atlanta,
Orlando, and Nashville) are being hit particularly hard.
Small business owners surveyed in these cities are more stressed
compared to the national average (70% vs. 57%) and are more
concerned with inflation (86% vs. 76% nationally). In fact, when it
comes to top concerns, Orlando and
Nashville small business owners
reported that inflation, rising costs and finding new customers
were at the top of the list, while Atlanta small business owners highlighted
inflation, rising costs, and economic uncertainty.
These higher levels of stress are having an impact. In the
Southeast specifically, participants report spending less time
exercising (46%), eating right (35%), and setting family
expectations to maintain their physical and mental health (11%).
They are also more apt to suffer negative consequences of stress,
particularly insomnia (83% vs. 72% nationally). However, when it
comes to actions taken to achieve a desired work-life balance,
fewer Southeast Market business owners have enlisted peers for
feedback and advice (9% vs. 17% nationally).
However, these Southeast Market small business owners are
staying optimistic. Small business owners in Atlanta (66%), Orlando (61%), and Nashville (61%) believe business will improve
next year. Those numbers are similar to the national average of
62%.
Greater focus on customer acquisition and digital
marketing
With high expectations for the year ahead, 87% of
small business owners report having sales/revenue growth goals in
for the next 3-5 years, including to be profitable with a modest
salary for themselves (50%), to build a business they can pass on
to family/loved ones (32%), and to bootstrap growth as
sales/profits increase (26%).
When it comes to how to bring those goals to life, small
business owners are prioritizing customer growth, with increasing
sales efforts being the most common strategy (39%), followed by
boosting digital marketing (24%). The vast majority of small
businesses (85%) anticipate making an investment in marketing and
sales, with anticipated investments focused on advertising (44%)
website improvements (39%), and building an online/social media
presence (36%). Of the 60% of small business owners that currently
use AI applications for their businesses, (27%) report leveraging
this technology for marketing purposes.
About Truist
Truist Financial Corporation is a
purpose-driven financial services company committed to inspiring
and building better lives and communities. As a leading U.S.
commercial bank, Truist has leading market share in many of the
high-growth markets across the country. Truist offers a wide range
of products and services through our wholesale and consumer
businesses, including consumer and small business banking,
commercial banking, corporate and investment banking, insurance,
wealth management, payments, and specialized lending businesses.
Headquartered in Charlotte, North
Carolina, Truist is a top-10 commercial bank with total
assets of $535 billion as of
March 31, 2024. Truist Bank, Member FDIC. Learn more at
Truist.com.
1 A 20-minute online interview
from February 2, 2024 – February 23, 2024, with
businesses that met the following qualifying criteria:
- Geographically representative of US businesses within each
revenue sub-group
- Work in a relevant industry, excluding Financial
Services/Insurance, Not for Profits/Religious and Government
Organizations
- Company's Annual Revenue is between $100K to $10M
- $2M to $10M revenue band added this year
- Sole decision maker for financial decisions, or strongly
influences decisions
- 844 total unweighted interviews - National:
- 264 Small Businesses with annual revenue $100K up to $999K
- 266 Small Businesses with annual revenue $1M to $1.99M
- 314 Small Businesses with annual revenue $2M to $10M
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SOURCE Truist Financial Corporation