Results of the inaugural Global Business Monitor by Bibby Financial Services (BFS) found that U.S. business decision makers (BDMs) are markedly more optimistic about the current state of the domestic economy than that of the global economy. 49 percent of respondents describe the U.S. economy as performing positively, while only 12 percent said the same about the global economy. Interestingly, the negative global outlook was the same both before and after the recent Brexit decision.  In addition to conclusions about 2016, the research also presents findings on the domestic economy, global outlook and key business challenges looking ahead to 2017. An infographic outlining key findings can be found here.

Top Business Challenges & Strategic Investments

BDMs in the United States continue to face common challenges, from time management to government legislation. The Global Business Monitor identified the following issues that made the list:

• 51 percent are concerned about containing rising overhead costs
• 46 percent are watching government regulations and legislation
• 39 percent are keeping an eye on cash flow
• 37 percent face the logistical challenge of finding the time needed to run their business

“Looking to 2017, and particularly given the recent presidential election results, I think we will see even greater focus on changes in government regulations and interventions and the impact this may have on businesses,” said Ian Watson, CEO North America for Bibby Financial Services. “It’s also likely that we will start to see a shift in market sentiment towards the U.K. once the formal exit from the EU commences following its triggering of Article 50 expected around the end of March next year,” he continued. “Whether this proves to be more or less positive remains to be seen.”

Leading Areas for Strategic Investments

Leaders in U.S. businesses plan to make strategic investments through the remainder of 2016, including a focus on sales and marketing efforts (51 percent), training and development of current staff (50 percent), IT and digital technology improvements (45 percent) as well as necessary machinery and equipment (40 percent). Only a very small percentage (2 percent) indicated they have no intention to invest in their organization. The digital economy continues to be a powerful force, as the use of social media is identified as the greatest growth opportunity for these businesses.

Access to Finance

About one quarter of those interviewed are turning to commercial finance products to fund their businesses. Survey results indicated that reinvesting profit was the most common source of finance for businesses with 1-9 or 10-49 employees, with bank loans the most common for those with 50+ employees.  The second most common sources for all three categories are as follows:

• 1-9 employees: 17 percent are self funded
• 10-49 employees: 18 percent utilize accounts receivable (AR) financing
• 50+ employees: 11 percent are self funded

While most respondents indicated that the majority of their customers pay within 30 days, nearly a quarter have experienced bad debt in the last 12 months as a result of non-payment and 20 percent stated that bad debt had negatively impacted their growth.  Such findings indicate that services like account receivables management would benefit small to medium enterprises as much as they do larger businesses; 38 percent of respondents with annual sales over $7 million already utilize AR financing.

Perhaps the largest opportunity for U.S. lenders is in learning the unique challenges of their customers’ business workings and tailoring their offerings to meet these needs. Most respondents stated that they feel it is important for their financial services provider to have a sound and thorough understanding of how their business operates but in reality, very few are living up to this expectation. “While optimism is high overall, it is clear that access to fast, flexible funding customized to each organization’s specific goals and needs will be critical in the coming months and years,” said Watson.

The Global Business Monitor was developed by Bibby Financial Services to research SME sentiment on topics such as confidence, the economy, access to finance, opportunities and threats. A survey of 30 questions was created and Critical Research was commissioned to conduct the research which was 200 phone interviews conducted in the United States between June 16, 2016 and July 7, 2016. Research was conducted both before and after the UK’s EU referendum vote and recorded accordingly.