Millennial small business owners are feeling the most positive about
running and growing their business in today’s economy, according to Capital
One’s second quarter Spark
Business Barometer, a quarterly survey measuring the economic
perceptions and financial conditions of small business owners, and
gauging sentiment on top issues and trends impacting small businesses
today.
The nationwide survey revealed that overall small business sentiment is
up – with 39 percent of all small business owners reporting a better
financial position today compared to one year ago. That positive
perspective was particularly true for millennials (18-33-year-olds) who
were the most optimistic group surveyed when asked about their sales
volume, economic outlook and plans for growth. In fact, nearly
two-thirds (62 percent) of millennial small business owners reported
increased sales in the past six months, compared to 41 percent of small
businesses overall and 45 percent of millennial small business owners
plan to hire in the next six months (versus 30 percent of all small
business owners). The survey also found that more millennials support
legislation, like minimum wage increases, that could improve their
workforce’s financial position.
“Millennials, like every generation, have their own unique experience
and perspective, and this quarter’s Barometer shows many millennial
small business owners are feeling confident and ready to take advantage
of improvements and growth in the broader economic environment,” said
Buck Stinson, head of small business credit card at Capital One.
“Regardless of where you are in your journey as a business owner, there
are many innovative tools and resources designed to simplify and enhance
core business processes, giving business owners more time to focus on
managing and growing their business. At Capital One, we’re very excited
to serve small businesses of all types, and help them go after and
achieve their goals.”
Minimum Wage Legislation
This quarter’s Barometer also explored small business sentiment related
to minimum
wage legislation, and found that business owners are split on the
issue – with 36 percent in favor of increased wages, and an equal
percentage opposed to such increases. A significantly higher number of
millennial small business owners (47 percent) support the proposals. The
survey also revealed:
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Of the small business executives that support the proposals to
increase the minimum wage in their state, 63 percent say that
increases to the federal minimum wage would have no impact on their
business while 10 percent indicate that it would be easier to recruit
and retain new employees.
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Small business owners that oppose proposals to increase the minimum
wage in their state are four times more likely to say that they would
lay off employees if the federal minimum wage were increased.
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Millennials are more likely than other generations to cite positive
impacts for an increased minimum wage, with 17 percent reporting that
it would make it easier to recruit and retain new employees. Only 6
percent of gen X (ages 34-44), 3 percent of baby boomer (ages 45-64)
and 7 percent of silent generation (65 and older) business owners
agree. Millennial small business owners are also less likely than
others to lay off employees or freeze hiring plans as a result of
increased minimum wages.
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32 percent of small business owners overall indicated that they would
raise prices to offset the cost of increased wages.
Survey Highlights
The second quarter Spark Business Barometer’s key findings are
summarized below:
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Small business sales are up. According to this quarter’s
survey, 41 percent of small business owners increased sales over the
last six months, while more than one third (34 percent) report that
sales have remained the same. Small business sales results have been
trending upwards, with more small business owners reporting sales
improvement than sales stagnation in each of the previous three
quarters.
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Positive future outlook is on the rise. Looking ahead, small
business owners are cautiously optimistic about the future. The survey
found that while 45 percent of small business owners believe their
firm’s financial situation will be better in six months, another 45
percent expect their situation to remain the same. This sentiment has
improved steadily over time – in Q1 2009, 34 percent of small business
owners indicated that they felt their firms’ financial positions were
worse than the previous year.
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Optimism at the local level is exceeding optimism at the national
level. Small business owners across the country continue to be
more confident in the outlook for the local economy than the national
economy. Nearly half (49 percent) of those surveyed are optimistic
about the direction the national economy is headed in the next 12
months, although sentiment among millennials is significantly higher
(79 percent) than the national average. Three-quarters (74 percent) of
millennial small business owners consider business conditions
excellent or good – only half (51 percent) of total small business
owners agree with this sentiment. Optimism in the national economy is
down 3 percent since the first quarter.
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Current financial situations are improving. When asked to
compare their current financial situation with this time last year, 39
percent of small business owners believe they are better off, which is
a 5 percent improvement since the previous quarter and the highest
since 2012.
-
Millennial small business owners are more likely to support minimum
wage increases. Small business owners overall are divided on
proposed minimum wage increases. More than one-third (36 percent) are
in favor of the proposed increase, while another one-third (36
percent) are opposed. Nearly half of millennial small business owners
(47 percent) support the proposals.
-
Small businesses owned by millennials are more likely to hire in
the next six months. Forty-five percent of millennial small
business owners intend to hire new employees, compared with 30 percent
of small business owners overall.
“Small businesses have a tremendous impact on our local and national
economies, with two out of three new jobs being created by small
businesses, and the countless product and service innovations they bring
to the marketplace,” said Keri Gohman, head of small business banking at
Capital One. “Owning a small business isn’t always easy, but it can be
incredibly rewarding, and we’re committed to understanding and helping
address the unique needs and challenges today’s business owners face.
Whether it’s through business intelligence and insights, digital tools
and resources, improved access to capital, or industry leading rewards
programs, we’re focused on enabling and empowering both aspiring and
established businesses – and helping them achieve their goals.”
Given how vital small business success is to both the national and local
economy, Capital One remains committed to understanding the challenges,
trends and perceptions that affect overall performance and day-to-day
operations. Capital One strives to understand the small business
landscape, in an effort to better serve its clients and customers across
the country. Follow along on Facebook at Capital One Small Business and
on Twitter at @CapitalOneSpark. When sharing on social media, please use
hashtag #SparkBizBarometer to follow the conversation.
Survey Methodology
The findings reported in this release are from a telephone survey
conducted by the opinion research firm, APCO Insight, the global opinion
research division of communications consultancy, APCO Worldwide. APCO
Insight interviewed a nationally-representative random sample of 400
for-profit small businesses in the U.S., weighted to Dunn and Bradstreet
counts of all businesses nationwide by SIC code, employee size, and
geography. Small businesses are defined as those with less than $10
million in annual revenue. The interviews were conducted from June 24 –
July 2, 2014. All interviews were conducted by telephone at their places
of business. One respondent per business was contacted. The margin of
error is ± 4.9 percentage points at the 95 percent confidence level.
Interviews were monitored at random. Sampling for this study was
conducted using a national sample of businesses drawn from InfoUSA. All
interviews were conducted using a computer assisted telephone
interviewing (CATI) system. Statistical weights were designed from the
United States Department of Commerce to ensure proper inclusion of all
SIC codes.
About Capital One
Capital One Financial Corporation (www.capitalone.com)
is a financial holding company whose subsidiaries, which include Capital
One, N.A., and Capital One Bank (USA), N. A., had $205.9 billion in
deposits and $298.3 billion in total assets as of June 30, 2014.
Headquartered in McLean, Virginia, Capital One offers a broad spectrum
of financial products and services to consumers, small businesses and
commercial clients through a variety of channels. Capital One, N.A. has
approximately 900 branch locations primarily in New York, New Jersey,
Texas, Louisiana, Maryland, Virginia and the District of Columbia. A
Fortune 500 company, Capital One trades on the New York Stock Exchange
under the symbol "COF" and is included in the S&P 100 index.
Copyright Business Wire 2014