Q2 proved to be a period of growth and excessive yawning for small businesses owners. According to the MetLife & U.S. Chamber of Commerce Small Business Index survey, respondents slept 6.7 hours a night on average, well below the eight recommended hours. Regardless of needing a good nap once in a while, however, small business owners are staying pretty optimistic.
The index revealed an overall optimism score of 68.7, up 2.4 points from the first quarter of 2018. “CEO optimism has held at favorable levels during the past year, but one issue of some concern is that CEOs anticipate slowing growth in the national economy during the year ahead,” said Dr. Richard Curtin, director of research at the University of Michigan, who analyzed the data. “In contrast, many observers now anticipate a stronger pace of economic growth in 2018 and a modest slowdown in 2019.”
The feeling of optimism present in today’s entrepreneurs is a result of good things happening for small businesses in Q2. Businesses saw major increases in profitability according to the Q2 2018 Private Capital Access Index (PCA Index) from Pepperdine Graziadio Business School and Dun & Bradstreet. According to the index, 61% of businesses were operating profitably in Q2, an increase of 9% year over year, and 5% quarter over quarter.
Business owners have also reported an increased ability to secure capital, with success rates increasing across all categories in the second quarter of 2018. “The improved private business financing success rates, particularly with equity, are consistent with what we have seen recently in the private equity and venture capital markets,” said Dr. Craig R. Everett, director of the Pepperdine Private Capital Markets Project.
With increases in profitability and access to capital, many small businesses are planning major increases. 61% of firms plan to increase employment, compared to just 5% who plan to reduce their workforce. 48% of those surveyed plan to increase investments in the business, while just 8% expect declines.
These planned investments indicate progress to come and hint towards a growing optimism present in today’s entrepreneurs. It’s a good day to be in business. Let’s hope it stays that way for a long time.