Small businesses expect to grow, but fewer will be adding jobs this year, says joint study
The Chicagoland Chamber of Commerce’s annual Small Business Outlook Survey, presented by BMO Harris Bank, reveals that Chicagoland’s small business owners are cautiously optimistic going into 2020, but have growing concerns about the region’s taxes, regulatory requirements, and economic conditions.
The research was conducted by Professor Alex Krasnikov and his marketing class, and reflects responses from a cross-section of regional small business owners with fewer than 500 employees.
Professor Krasnikov presented the results at a January 29, 2020, chamber event. The 2020 survey focused on small business owners’ concerns and needs and this took a deeper dive into workforce and employment outlook.
Small business concerns
Overall, 86% of business owners have concerns over taxes vs. 81% in the previous year. Managing cash flow is another area of concern, with approximately 75% of small businesses expressing lack of confidence in managing. We are also seeing a growing concern around regulatory requirements, with 74% of respondents concerned about regulations, a 6% increase. Access to capital remains a concern for 63% of respondents, up 2% from the previous year. Surprisingly, healthcare cost concerns dramatically reduced from 88% in previous year to 77% this year.
Small business needs
Small business owners often lack the bandwidth and expertise to tackle issues of importance to their business success. Market research led the way in needs, with 67% saying they lacked the expertise in this area, up 4% from the prior year. A full 41% of respondents need access to capital, up 35% from the previous survey. Dealing with local government continues to be a need, with 35% of respondents identifying this as an area they do not have expertise in, up 6% from the previous year.
Talent development, attraction and retention remains a top concern. We saw a significant drop in the number of small businesses expecting to add full-time employees, 27% compared to 41% in the prior year. Adding part-time workers also saw a drop, though less substantial with only 33% of respondents indicating they would add part-time workers, down 3%. A full 56% of employers feel challenged in finding qualified candidates, citing lack of candidates with qualified skills (29%) and salary expectations (23%) as the top two reasons they are not able to fill positions.
Overall, 57% of small business owners still expect to expand their business in Illinois, down 4% from the previous year. However, expectations of expanding into other states stayed relatively flat at 31% vs. 32% the previous year and owners expecting to expand internationally were at 17% vs. 18% the prior year. A full three quarters of businesses still expect to grow this year and 58% are expecting to increase their revenues.
Read the full 2020 survey results. The survey results are used to inform Chicagoland Chamber of Commerce’s programming and advocacy efforts. For more information about the chamber, its Small Business Development Center, and the resources available to businesses of all sizes, visit www.chicagolandchamber.org.
Survey in the news
- Chicago Sun-Times
Small business survey finds pullback in hiring plans →
- Crain's Chicago Business
Small Business Outlook Survey results show concerns →
Quinlan marketing classes have partnered with the Chicagoland Chamber of Commerce since the inception of the Small Business Outlook Survey. Read about the survey results from previous years: