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Outlook for Small Businesses in 2017

January 10, 2017

Elizabeth Thomas, Business Development Specialist, Office of Small Business

2017 Forecast.jpgThe Business Journals, a division of American City Business Journals, publisher of metropolitan business newsweeklies in the United States, recently published a report, “2017 Predictions: Growth Industries and Locations, Plus the Topics that Will Matter Most.” Here are highlights, including responses from 400 small and medium-sized business owners on opportunities, threats and changing demographics in the workplace.

Upbeat and Optimistic

The trend is up and to the right and the outlook is rosy. Not surprisingly, late 2008 through Q1 2009 was a difficult time for small businesses and small business owners were pessimistic that their company’s prospects would change in the next 12 months. By 2010 optimism had rebounded and held steady for six years. Based on preliminary results (400 completed interviews) The Business Journals projects that 82 percent of small and medium-sized business owners see positive change for their companies in the next 12 months, the highest rating in nine years.

Where is the Growth Happening?

According to U.S. Census data documented in The Business Journals report, Austin, Miami and Houston lead the country in the growth of small and medium-sized businesses. Overall, between 2009 and 2014, the number of small and medium-sized businesses grew in 74 percent of the 50 largest U.S.  Metropolitan Statistical Areas, which are home to two thirds of all businesses nationwide.

In terms of market segments, health care, professional/technical services and Hispanic-owned businesses are spotlighted as growth engines. The health care and the professional/technical services market segments boast over 1.7 million small and medium-sized businesses and achieved over 8 percent and 4 percent growth respectively between 2008 and 2014. Citing the State of Latino Entrepreneurship, 2015 Research Report, Stanford Latino Entrepreneurship Initiative, The Business Journals notes that Hispanic-owned businesses are growing over 40 percent, or three times the national average, playing “a substantial rode in job creation and economic development” and leading The Business Journal to call 2017 the “year of the Latino entrepreneur.”

What, me worry?

With all this good news comes some areas of concern. Small and medium-sized business owners are “very concerned” about rising health care costs. 72 percent of respondents to the question, “How does your company currently share the cost of health insurance with its employees?” answered that the company pays all or most of the costs and another 22 percent share the cost equally with employees. If the Kaiser Family Foundation projection of a 10 percent premium increase in 2017 cited in the report comes true, this could have a significant financial impact on small businesses.

The Business Journals also presents some startling data on the threat of cyber intrusions into small businesses:

  • “More than half a million small and medium-sized businesses will shut down in 2017 because of cyber security breaches.” (The Business Journals 2017 Predictions: Growth Industries and Locations Plus the Topics that Will Matter Most)
  • 43 percent of all cyberattacks target small and medium-sized businesses (Symantec: Internet Security Threat Report 2016)
  • 60 percent close their doors within six months of the breach (National Cyber Security Alliance 2016)

Workers Just Wanna Have Fun!

Finally, the report looks at two aspects of the changing work environment: mobile technology and Millennial employees.

While some small company owners are embracing mobile technologies for their own use, marketing strategies and advertising continue to rely on more traditional methods including print advertising, trade shows and events, and direct mail. In considering the impact that Millennials, who according to the Bureau of Labor Statistics will account for half of all workers in 2020, are having on company culture and operations, The Business Journals includes the following about Millennials’ attitudes towards work:

  • 88 percent want a fun, social work environment
  • 81 percent should be able to set my own work schedule
  • 63 percent are motivated by money

Learn More

Click here to read the full Business Journals 2017 Predictions. Also, learn why small businesses embrace exporting as a channel for growth. Read 5 Reasons U.S. Companies should Export and contact your EXIM Bank representative today.

Free Guide to Export Credit Insurance!

 

  

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