About three-quarters of U.S. small and midsize companies are optimistic about their own performance, and the majority expect to grow sales this year, according to the annual JPMorgan Chase Business Leaders Outlook released this week.
According to the survey of 1,800 business leaders, 76 percent of midsize companies and 74 percent of small businesses are optimistic about their performance, with 70 percent of midsize companies and 62 percent of small businesses expecting sales to grow this year.
In the Northeast, half of midsize businesses are optimistic about the local economy, reflecting a slightly more cautious outlook than across the entire U.S. (63 percent). Despite a more cautious outlook for the local economy, Northeast midsize business respondents are more likely to increase personnel in the year ahead, 61 percent planning to hire in the Northeast compared to 55 percent all of the U.S.
Some local lenders see small business’ growth potential as an opportunity, and are adapting their banking platforms to take advantage of it, as Banker & Tradesman reported last month.
Though businesses want to hire to prepare for an expected growth in sales, a limited supply of qualified candidates is making it increasingly difficult to do so, according to the survey. For the second consecutive year, midsize businesses rank this as the top challenge, citing a lack of applicants and unique skills needed for the job. Small businesses also report this challenge, with 31 percent extremely or very concerned about the candidate supply, up from 28 percent last year.
Despite the concerns, businesses expect to hire, with 55 percent of midsize businesses and 39 percent of small ones expected to increase full-time employees over the next year. Small businesses also expect to add part-time employees, with 38 percent planning to hire, up 7 percentage points from 2019.
To retain talent, businesses plan to increase compensation, improve benefits and provide flexible hours.
Many small businesses (69 percent) report having experienced unexpected growth, and of these companies, 91 percent have gone through it more than once. While small business leaders feel largely positive about the growth, they acknowledge having to work longer hours and purchase more supplies and inventory as a result.
“Unexpected growth is a good problem to have but it can be stressful for small business owners,” JPMorgan Chase Business Banking CEO Jen Roberts said in a statement. “They have to reassess their short and long-term strategies, which could mean managing their cash flow more efficiently, incentivizing staff or investing in technology to help them scale.”
