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U.S. Microbusiness Owners Finish 2014 Feeling Strong

U.S. Microbusiness Owners Finish 2014 Feeling Strong

by Ben Ryan

Story Highlights

  • Growth expectations up from third quarter
  • Confidence in the future up year on year
  • Strong growth ambitions mean higher expectations, more concerns

WASHINGTON, D.C. -- Microbusiness owners are starting 2015 in higher spirits and with higher expectations than one year ago. According to the Sam's Club/Gallup Microbusiness Tracker, fewer business owners find themselves letting employees go or worrying about cash on hand, and more express confidence in the future of their business. Even as microbusiness owners are feeling more confident, those with strong growth ambitions are more optimistic about business growth than other owners and are more likely to be hiring, but they also have more concerns and higher dissatisfaction with their current circumstances.

U.S. Microbusiness Owners' Expectations for Next Year

Owners of U.S. microbusinesses, defined as those running a business with five or fewer workers, have significantly improved their expectations for how their personal income from their business will change over the next year. Microbusiness owners' expectations for higher personal income in the next year are up six percentage points from this time last year. Meanwhile, the percentage expecting less personal income from their business has dropped by half since December 2013 -- from 24% to 12%.

Microbusiness owners also reported fewer concerns about their cash reserves or bottom line at the end of 2014 than they did a year ago. While a slight majority, 52%, said in December that having cash reserves was a "major issue" for their business, this was down from 58% in December 2013. Similarly, fewer now report having dipped into personal savings to make ends meet (36% vs. 44%).

Microbusiness Owners More Positive About Finances

Microbusiness owners' growth expectations have improved from September 2014, though they are steady with March 2014, when the Sam's Club/Gallup Microbusiness Tracker first began asking this question. The percentage of owners saying they expect to grow their business' sales and revenue in the next year is up 10 points from September, though only two points for the year. This in turn appears to translate into improving confidence in the future. The percentage strongly agreeing they are confident in the future of their company is up seven points from September and four points from this time last year, to 44%.

Improving Growth Expectations and Confidence in the Future

Owners With Strong Growth Ambitions More Likely to Hire, Have More Worries

Despite an improving outlook, not all microbusiness owners are eager to grow their business much larger than its current size. Almost half (47%) of all microbusiness owners want to keep their business the size that it is now, while another quarter (26%) would only want to grow two to five times larger than where they are now. Fewer than one in five (18%) have ambitions to grow their business "as large as possible."


Growth ambitions track closely with growth expectations; 43% of those who say they want to stay the same size also say that they expect next year's sales and revenue to remain flat, while 46% of those who say they want to grow as large as possible also say they expect strong growth in the next year (10% or more). Perhaps unsurprisingly, owners with strong growth ambitions are also much more likely to be hiring than those seeking to maintain their current size.


At the same time, microbusiness owners who want to significantly grow their business are more dissatisfied and have more concerns about their business than owners with lower aspirations. They are more likely to express concern over a range of issues, such as having healthy cash reserves, saving for retirement, finding qualified employees and finding more customers.


Bottom Line

The improving financial picture among microbusiness owners in December 2014 mirrors rising spirits and stronger economic signals in other economic metrics Gallup regularly tracks. Economic confidence is up, unemployment is down and consumer spending is strong. The rising tide appears to be lifting these smallest of boats as well.

There is a strong connection between microbusiness owners' aspirations and their outlook for financial growth, with owners who want to grow being the most optimistic. But these owners are also more likely to be dissatisfied with their standard of living and their access to the human and financial capital needed to grow a business. While microbusiness owners' financial concerns generally have eased over the past year, owners who are looking to grow are still very concerned about cash reserves and savings, and dissatisfied with their standard of living. Whether this indicates they are in distress or merely expressing healthy frustration with their current status as they seek to grow is unclear, but this dissatisfaction with the status quo may be a big part of where their ambition to grow comes from.

Survey Methods

Results for the Sam's Club/Gallup Microbusiness Tracker are based on telephone interviews conducted on a quarterly basis with a random sample of microbusiness owners aged 18 and older, living in all 50 U.S. states and the District of Columbia. Business owners selected were those who reported owning a "microbusiness" with five or fewer workers, including the owner. Results from the Quarter 4, 2014, study are based on 1,007 interviews conducted Nov. 24-Dec. 15, 2014. For results based on the total sample of Quarter 4, 2014, business owners, the margin of sampling error is ±4.2 percentage points at the 95% confidence interval.

Interviews were conducted with respondents on landline and cellular telephones. All interviews were conducted in English. Respondents were chosen at random from a group of people who had completed a previous general Gallup telephone interview and indicated they were a business owner and were willing to be contacted for a future survey. The sample was stratified by businesses size and weighted for business size and region.

Learn more about how the Sam's Club/Gallup Microbusiness Tracker works.

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