Business owners and top decision-makers are more optimistic about their own businesses in 2014 than they are about the overall U.S. economy, according to an annual survey sponsored by SunTrust Banks, Inc. Sixty-five percent of leaders in companies with annual revenue of $10-150 million expect their business to be in even better financial shape in six months; however, only 48 percent believe the overall economy will be better.
Business leaders cite top financial priorities as increasing revenue and profitability, reducing expenses and improving customer satisfaction. They plan to stimulate growth by investing in new technology (48 percent), purchasing/leasing new equipment (34 percent) and expanding domestically and globally (34 percent).
To finance these activities, 50 percent of companies plan to reinvest earnings. In addition, more than 33 percent plan to tap new or existing loans and lines of credit or obtain equity financing from investors.
"Businesses believe they are in a strong position to make the capital investments and expansion decisions required to move forward," said Mark A. Chancy, wholesale banking executive at SunTrust. "Nearly half expect to have an increased need for credit or financing services this year, and 77 percent feel they are on track to access the needed capital."
In a comparable survey of small businesses with annual revenue of $2-10 million, sentiments about the economy mirrored those of mid-market companies. Sixty-three percent were positive about the current strength of their own business, while only 34 percent felt the same about the general economy.
Top challenges cited by small businesses for 2014 include changes in health care laws and requirements (34 percent), increases in operating costs (34 percent), managing cash flow (31 percent) and new or increased competition in their sector (28 percent). When assessing the overall strength of their small business, owners were most confident about the ability to pay vendors in a timely manner, obtain credit and manage operating costs. Sixty-eight percent of small businesses feel they will be able to secure the capital they need to reach their 2014 goals.
"Businesses expect their banks to understand the challenges they face, and this survey is one tool we use to stay on top of key trends," said Chancy. "SunTrust helps small and mid-market businesses grow, not only through access to credit, but also by providing expertise on investments, cash flow and other evolving needs."
Decision-makers representing approximately 500 small and mid-size businesses participated in the SunTrust/Radius Global Market Research survey. Survey results have a maximum margin of error of +/- 4 percentage points at the 95 percent confidence level.