Although declining optimism was the finding among small-business owners in the first quarter 2019 Wells Fargo/Gallup Small Business Index — along with a decrease in the number reporting a revenue increase (a 10-point drop to 45 percent) — the 23-point drop from the previous quarter’s all-time high of 129 still left a score above 100 — for the seventh consecutive quarter.
Along with that positive attitude was a positive view on preparedness for a future economic downturn. More than three quarters (77 percent) said they were somewhat prepared or very prepared for such an event, compared with 23 percent who said they were not very prepared or not at all prepared. Also, when asked if 2019 would be a year of economic prosperity or difficulty, 67 percent indicated prosperity and 29 percent indicated difficulty.
Proprietors who owned their businesses during the 2008 recession were asked to compare their preparedness now to that point in time. The number of owners saying they were more prepared now was 75 percent; 14 percent said they were less prepared. In addition, when asked what their greatest lesson was in the decade since the 2008 recession, the most frequent response was conservative capital management and frugality (19 percent). Other lessons included monitoring cash flow (12 percent) and good planning (9 percent).
“With the various economic indicators we’ve seen, the decrease in revenues and outside factors like the government shutdown, business owners are predictably more cautious than in 2018,” says Mark Vitner, Wells Fargo senior economist. “With that said, their responses around preparedness and their continued sense that 2019 will be a prosperous year economically indicate a sense of caution as opposed to a prediction of an economic slump.”
The survey also found that, for the fourth consecutive quarter, a high of 16 percent of business owners indicated hiring and retaining staff is their top challenge; attracting new business rose to nearly the same level as a top challenge, with 15 percent citing it. Other challenges cited include financial stability/cash flow (9 percent) and taxes (8 percent), both of which continue to be top issues for small business owners.