New research from Kabbage, an online provider of small business loans, shows that small business optimism is at a three-year high. Ninety-five percent of Kabbage small business owners surveyed expect to grow their revenue in 2015, and half of all businesses expect to grow by more than 20 percent. This represents a meaningful increase over the past two years when small businesses reported 76 percent year over year revenue growth for 2014 and 2013. Despite their optimism, half of all business owners cite cash flow management and access to capital as their primary concerns for 2015.
Small business owners across all industry sectors and geographies were optimistic about their 2015 revenue growth. The most bullish industries include (in order): consulting/marketing services firms, beauty/fitness/spas, retailers, restaurants, home services, manufacturing, and auto/transportation.
How will businesses grow in 2015?
Other key findings from the survey include:
- Growth will come from investing in marketing and launching new products and services. 70 percent plan to expand their product offering, while 52 percent intend to invest in marketing.
- To facilitate marketing growth, small businesses are most likely to invest in social media, search, and content marketing. More than 50 percent say they will start using social media marketing in 2015.
- When it comes to seeding their growth, access to capital is a concern for 48 percent of businesses, while 53 percent report ongoing cash flow management as their top concern.
- Businesses will turn to bootstrapping and alternative funding providers like Kabbage to fund their growth in 2015. Only 14 percent plan to go to traditional banks.
“Small businesses employ 57 percent of the U.S. workforce, so the fact that the majority of them are planning for such a robust 2015 is a strong positive signal for the overall economy,” said Rob Frohwein, Co-Founder and CEO of Kabbage. “We are proud to be the financial backbone behind tens of thousands of businesses as they invest to drive growth in 2015 through hiring, capital investment, new facilities, and marketing and product expansion.”
The personal side: The face of the small business owner
The survey also revealed that being a small business owner is an around-the-clock job.
- 52 percent of small business owners work over 60 hours per week, and 30 percent expect to work even more hours in 2015.
- Small business owners make constant sacrifices to support their businesses – the majority report postponing vacations, using personal savings, and cutting personal expenses all to grow their businesses.
- Many business owners are working to achieve more balance – 40 percent say they expect to make fewer sacrifices in 2015 than in 2014.
The survey was conducted in December 2014 of Kabbage small business customers across all industries. More than 800 businesses responded to the survey. Follow Kabbage at @KabbageInc.