The time is right for many small businesses to take off in 2015.
In our latest Wells Fargo/Gallup Small Business Index survey, small business owners reported the highest level of optimism in seven years, underscoring a strengthening economy.
The quarterly small business survey, conducted Jan. 5–9, found a 13-point gain in the overall Small Business Index score, increasing from +58 in November to positive 71 (+71).
The index score, which measures small business optimism, has been climbing steadily during the past two years and is the highest it has been since January 2008 (when it was +83).
Kicking off 2015, business owners said they saw improvement in their businesses in the following areas:
- Improved revenue. In the January survey, 49 percent of small business owners reported that their revenues increased a little or a lot over the past 12 months, up from 37 percent a year ago. This improvement represents the highest reading on this measure since 2007, when 52 percent of small business owners reported increased revenues in the second quarter.
- Better cash flow. Business owners saw modest improvements in their cash flow during the past 12 months, with 54 percent rating their company cash flow as very good or somewhat good, compared to 52 percent in the first quarter of 2014.
- Hiring is up. More business owners increased the number of jobs at their company during the past 12 months (19 percent). Just 11 percent report a decrease in jobs compared to 16 percent in last quarter’s survey.
- Access to credit. The ability to obtain credit also improved, with more than a third (34 percent) of survey respondents reporting that it was somewhat or very easy to obtain credit during the past 12 months, up from 30 percent in November 2014 and 28 percent a year ago.
This is significant because it shows that business owners are seeing real improvement in their business operations and finances and are not just hopeful for the future.
With economic fundamentals improving, we hope that this trend continues and results in even stronger small businesses in 2015.
Hopeful for the year ahead
One small business owner, and Wells Fargo customer, who’s hopeful for the year ahead is Roberto Guerra, owner of La Caja China in Miami. Guerra has been in business for 27 years and sells his BBQ roasters in the U.S. and internationally. He employs 12 people and said he is planning to hire about six more employees in the next six months.
Guerra says sales for La Caja China, which has been featured on the Food Network and on Martha Stewart.com, have been increasing since 2013 and remained strong in January, which, he says, signal a great 2015. He’s also applying for a business line of credit to expand his product line to include two new roasters and a smoke box.
“January is a good gauge for my business,” Guerra adds. “With this bad winter, all the guys inside are desperate to go out and go cooking. So we’re expecting to have a great year.”
He also says that the improvement in the economy has helped his business.
“To us, we came out of the bad recession in 2013. That year I grew 22 percent,” Guerra says. “I have a feeling that the economy is really going to take off, and in our field we’re doing fine. The local economy here in Miami is different, but we sell nationally and have really seen things pick up.”
When small businesses are growing, that’s a good sign for our economy. And it tells us that the environment is right to spur even more startups and business growth. We know that many small businesses in America are still struggling, and we’re continuing to work in our communities to support entrepreneurs.
But with these positive signs of small business optimism, we hope to see even more small businesses across the nation grow, expand, and achieve success.
Case leads Wells Fargo’s focus on small business, which includes the Wells Fargo Works for Small BusinessSM website on wellsfargo.com and its research, tools, and other resources for existing and prospective business owners. Wells Fargo is the nation’s leading lender to small businesses in dollars and the leading lender of Small Business Administration 7(a) loans in dollars for five consecutive years, according to government data. Since August 2003, the Wells Fargo/Gallup Small Business Index has surveyed small business owners on current and future perceptions about the financial condition of their businesses.