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Survey says: Small business owners less optimistic about the next six months

February 13, 2024

Michiganders who own and operate small businesses have seen their optimism fall when asked about the prospects of their business over the next six months, the Small Business Association of Michigan (SBAM) says, after surveying more than 400 members. Fifty percent of small business owners surveyed say they’re somewhat or very optimistic about their prospects over the next six months, down from 57 percent when asked the same question a year ago. That figure rises to 66 percent when asked about long-term survival of their business, suggesting that entrepreneurs expect conditions to improve beyond six months. Pessimism when looking out long term registered at 20 percent, but grew to 28 percent when looking at the next six months of doing business in Michigan.

“Small business owners tend to be optimistic people. This survey suggests that while they are experiencing many challenges today, most expect improved conditions in the future,” said Brian Calley, President and CEO of SBAM. “Inflation, availability of labor, and the economy remain top concerns for small businesses. Their biggest concerns center around cost pressures and underscore the strong opposition small businesses have expressed in recent surveys against new, costly government mandates.”

Twenty-three percent of those asked said the economy generally is the biggest problem they’re facing, closely followed by inflation at 21 percent and availability of labor at 19 percent.

More than half of small businesses report that new restrictions from the U.S. Department of Labor restricting independent contractors will have a substantial or moderate impact on their business.

Regarding policymaking in Lansing, as lawmakers consider the development of a research and development tax credit, about one-third of small businesses say they would benefit from it.

Looking forward, 26 percent of small businesses report they’re already starting to use Artificial Intelligence (AI) in areas such as marketing, data analytics, virtual assistants, and business operations. Development of those tools could be hampered, however, as 44 percent of small business owners say they’re preparing for a possible recession by cutting expenses.

Of the small business owners surveyed, 55 percent have 1-10 employees, 31 percent have between 11-50, and 15 percent have 51 or more. Full results.

Previous Survey Results: Fall 2023, Spring 2023, Winter 2023

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