Small business owners are more optimistic than ever thanks to overall positive financial situations, according to the Wells Fargo/Gallup Small Business Index’s Q4 survey.
Since the Wells Fargo Gallup Small Business Index debuted in 2003, the current index score of 129 marks the highest ever. It’s up 11 points from Q3.
At its low point during the Great Recession, the index fell to -28.
Eight percent of Q4 survey respondents rated their financial situation as very good or somewhat good, and 84 percent expect their financial situation to be very good or somewhat good during the upcoming year.
Sixty-two percent of respondents are expecting revenue increases in the next year, and 55 percent have reported revenue increases recently.
Cash flow prospects for small businesses are positive, with 74 percent saying that they had good cash flow over the past year, and 78 percent saying they expect good cash flow over the upcoming year.
“As we head into the end of 2018, small businesses are continuing to indicate that they are thriving and hopeful for the future,” said Andy Rowe, Wells Fargo head of Customer Segments, in a statement. “With owner optimism hitting its highest level in the 15 years Wells Fargo has been conducting this survey, we are excited to see what this will mean for their continued capital investment and growth.”
The survey of 601 small business owners was conducted between Nov. 8 and 14, directly after the midterm elections.
The full range of the index is anywhere from -400 to 400 and is determined by two dimensions. The first is the owners’ ratings of the current situation of their businesses and, second, their ratings of how they expect their businesses to perform during the next year.
The survey took stock of what small business owners see as priorities for the incoming U.S. Congress.
Twenty-nine percent rated taxes as the top issue for Congress to address, while 12 percent called health care the most important issue and 11 percent deemed it government regulation.
About three in four respondents said congressional actions related to tax codes and regulations would be most important to business. Nearly two in three said each that overall small business regulation, and actions related to health care would be more important.
“With the increases we’ve seen in business owners’ revenues and the high degree of confidence business owners have in their cash flow, it’s not surprising that taxes remain a key issue for them,” said Mark Vitner, Wells Fargo managing director and senior economist, in a prepared statement. “While the number of business owners that don’t expect changes to their operating environment remains high, most see the current environment as very good and many business owners are looking to expand their business in 2019.”
Top challenges identified by the survey include hiring and retaining staff, attracting new business and taxes.
On a positive note, 47 percent of business owners said that obtaining credit was somewhat or very easy, up 7 percent from last quarter. Half of respondents believe that credit will be easy to obtain over the upcoming year and only one percent of those surveyed see access to credit as their top challenge.