B2B Payments

Despite Plenty Of Concerns, SMB Optimism Holds Fast

Small business owners have a lot on their plates today and, depending on who one asks, top concerns range from taxes to late invoice payments. Amid a wave of new surveys released on small business sentiment, PYMNTS wades through the data to examine how entrepreneurs are handling the array of worries with which they must deal. Luckily, research from Bank of America, Wells Fargo, Capital One and others often point to one thing: Despite the challenges, small businesses are optimistic.

Eighty-one percent of U.S. millennial small business owners expect revenue to increase in 2018, a whopping 30 percent greater than the national average of small- and medium-sized businesses (SMBs) overall, according to Bank of America's latest Business Advantage Small Business Owner Report, released last week. That doesn't mean non-millennial entrepreneurs are necessarily struggling, though. Bank of America also found in a fall 2017 survey that nearly three-quarters of SMBs expect their 2017 year-end revenues to beat 2016's figures. Still, less than half said they expect their local economies and the national economy to improve in 2018. Bank of America noted the survey represents a significant improvement in small business optimism in the U.S. compared to 2016's report, though there are significant differences across generations, genders and physical locations of those business owners, researchers explained.

Thirty-one percent of small businesses surveyed by Capital One say they're in a better financial position than a year ago, up from 31 percent who said the same thing last year. Capital One published it's Small Business Growth Index surveying 500 SMBs and, similar to findings by Bank of America, concluded U.S. small business optimism is on the rise. Sixty percent of small business owners agreed their current business conditions are either “good” or “excellent,” said Capital One. But that doesn't mean entrepreneurs are worry-free. In fact, 45 percent said they are concerned about taxes, making this topic an even greater worry for SMB owners than cash flow management (42 percent) and keeping up with technology (32 percent). Nearly one-third told researchers that current tax policy has negatively impacted their businesses, while nearly a quarter said loosened federal and state regulations overall have positively impacted their ability to grow.

$179.5 billion in working capital is on the books for U.K. SMBs, according to a new report by Grant Thornton. The company surveyed working capital management of the nation's SMBs and found that, overall, these companies have improved working capital performances. Eleven percent even said their working capital performances had improved three years in a row. Further, larger enterprises are actually underperforming in their working capital as well as profitability when compared to SMBs, the research found. It noted that small- and medium-sized companies have reduced their cash conversion cycles compared to last fiscal year.

Forty percent of small businesses in the U.K. say they receive late payments at least once a month, according to new research from Concur. Interestingly, mid-sized companies actually fare worse when it comes to getting paid on-time by their corporate buyers. Concur's survey found 63 percent of medium-sized firms get paid late at least once a month. Concur's senior regional director for enterprise, Emma Maslen, explained this is because small and macro-sized firms “have the agility and flexibility to make strategic decisions when it comes to cash flow,” while large enterprises have a “cash cushion.” Mid-sized companies, however, struggle to stay consistent with their cash flow, and often lack both the agility of a small business and the cash cushion of a large enterprise to be able to bear the brunt of late B2B payments.

Seventy-one percent of small businesses said their financial situation is at least somewhat good, according to the Wells Fargo/Gallup Small Business Index, released last week. The report, which surveyed small businesses in October, found optimism has remained more or less steady, but employment remains a top concern. Sixteen percent of small firms said hiring and retaining quality staff is their top concern, up from 13 percent the previous quarter. Nearly a third said they plan to increase the number of jobs at their companies next year. Employment concerns surpassed worries over taxes, finding new business, government regulations and cash flow management, according to the report.



About: Accelerating The Real-Time Payments Demand Curve:What Banks Need To Know About What Consumers Want And Need, PYMNTS  examines consumers’ understanding of real-time payments and the methods they use for different types of payments. The report explores consumers’ interest in real-time payments and their willingness to switch to financial institutions that offer such capabilities.