Small Business Confidence Reaches Highest Point in Five Years

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Small business optimism continues to rise as a majority of business owners are reporting increased sales and improved business conditions since earlier this year. Capital One's latest Small Business Growth Index, which polled 500 small business owners in August, found 60% of small business owners (SBOs) feel current business conditions are good or excellent, and 37% reported being in a better financial position than one year ago – up from 31% since earlier this year.

Meanwhile, despite the growing optimism, challenges persist for many small businesses. Taxes (45%), managing cash flow (42%) and keeping up with technology (32%) are top concerns for business owners in the coming year.

"It is always encouraging to see a positive shift in small business sentiment, considering the great impact they have on our local and national economies," said Celia Edwards Karam, head of small business bank at Capital One. "At the same time, it's clear business owners need better tools to help them address and manage challenges like cash flow and technology. We remain focused on understanding these challenges and delivering experiences designed to help businesses succeed and grow."

Following are key themes uncovered by the fall 2017 Small Business Growth Index. Additional findings, including historical data and breakdowns, can be found here.

Overall confidence is up: Capital One's Small Business Confidence Score tracking overall small business sentiment on the economy, hiring plans, future financial positions and recent sales, has reached its highest point since 2012.

Revenues are increasing: Nearly half (47%) of SBOs reported increased sales in the past six months, up 10 points from earlier this year.

Yet hiring plans remain flat: Plans for growth remain steady, with 25% of businesses planning to hire in the next six months – down two points from earlier this year. Seventy-two percent of SBOs said increases in minimum wage are not impacting business growth.

Concerns about cash flow and tech on the rise: The number of SBOs concerned with cash flow management increased 11 points from fall 2016, while the number of SBOs concerned with keeping up with technology increased seven points from fall 2016.

Taxes and other regulations are top of mind: Nearly a quarter (24%) of business owners report loosened federal and state regulations have had a positive impact on growth. Meanwhile, 37% of SBOs say the Affordable Care Act (ACA) has had a negative impact on business growth, and 30% say tax rates and laws have negatively impacted their business.

About Spark Business

Capital One offers a broad spectrum of financial products and services to consumers, small businesses, and commercial clients. Spark Business from Capital One offers a diverse suite of financial products, tools and services designed specifically for small businesses, including credit cards with unlimited rewards, no-fee checking and savings and retirement plans. Today, Spark Business works to address the unique needs of millions of business owners across the U.S. so they can focus on what they're most passionate about – running and growing their business.