Millennial Small Business Owners Most Optimistic and Likely to Hire
Capital One’s Spark Business Barometer Survey Reveals Improved Small Business Outlook and Clear Divide on Minimum Wage Legislation
The nationwide survey revealed that overall small business sentiment is up – with 39 percent of all small business owners reporting a better financial position today compared to one year ago. That positive perspective was particularly true for millennials (18-33-year-olds) who were the most optimistic group surveyed when asked about their sales volume, economic outlook and plans for growth. In fact, nearly two-thirds (62 percent) of millennial small business owners reported increased sales in the past six months, compared to 41 percent of small businesses overall and 45 percent of millennial small business owners plan to hire in the next six months (versus 30 percent of all small business owners). The survey also found that more millennials support legislation, like minimum wage increases, that could improve their workforce’s financial position.
“Millennials, like every generation, have their own unique experience
and perspective, and this quarter’s Barometer shows many millennial
small business owners are feeling confident and ready to take advantage
of improvements and growth in the broader economic environment,” said
Minimum Wage Legislation
This quarter’s Barometer also explored small business sentiment related to minimum wage legislation, and found that business owners are split on the issue – with 36 percent in favor of increased wages, and an equal percentage opposed to such increases. A significantly higher number of millennial small business owners (47 percent) support the proposals. The survey also revealed:
- Of the small business executives that support the proposals to increase the minimum wage in their state, 63 percent say that increases to the federal minimum wage would have no impact on their business while 10 percent indicate that it would be easier to recruit and retain new employees.
- Small business owners that oppose proposals to increase the minimum wage in their state are four times more likely to say that they would lay off employees if the federal minimum wage were increased.
- Millennials are more likely than other generations to cite positive impacts for an increased minimum wage, with 17 percent reporting that it would make it easier to recruit and retain new employees. Only 6 percent of gen X (ages 34-44), 3 percent of baby boomer (ages 45-64) and 7 percent of silent generation (65 and older) business owners agree. Millennial small business owners are also less likely than others to lay off employees or freeze hiring plans as a result of increased minimum wages.
- 32 percent of small business owners overall indicated that they would raise prices to offset the cost of increased wages.
The second quarter Spark Business Barometer’s key findings are summarized below:
- Small business sales are up. According to this quarter’s survey, 41 percent of small business owners increased sales over the last six months, while more than one third (34 percent) report that sales have remained the same. Small business sales results have been trending upwards, with more small business owners reporting sales improvement than sales stagnation in each of the previous three quarters.
- Positive future outlook is on the rise. Looking ahead, small business owners are cautiously optimistic about the future. The survey found that while 45 percent of small business owners believe their firm’s financial situation will be better in six months, another 45 percent expect their situation to remain the same. This sentiment has improved steadily over time – in Q1 2009, 34 percent of small business owners indicated that they felt their firms’ financial positions were worse than the previous year.
- Optimism at the local level is exceeding optimism at the national level. Small business owners across the country continue to be more confident in the outlook for the local economy than the national economy. Nearly half (49 percent) of those surveyed are optimistic about the direction the national economy is headed in the next 12 months, although sentiment among millennials is significantly higher (79 percent) than the national average. Three-quarters (74 percent) of millennial small business owners consider business conditions excellent or good – only half (51 percent) of total small business owners agree with this sentiment. Optimism in the national economy is down 3 percent since the first quarter.
- Current financial situations are improving. When asked to compare their current financial situation with this time last year, 39 percent of small business owners believe they are better off, which is a 5 percent improvement since the previous quarter and the highest since 2012.
- Millennial small business owners are more likely to support minimum wage increases. Small business owners overall are divided on proposed minimum wage increases. More than one-third (36 percent) are in favor of the proposed increase, while another one-third (36 percent) are opposed. Nearly half of millennial small business owners (47 percent) support the proposals.
- Small businesses owned by millennials are more likely to hire in the next six months. Forty-five percent of millennial small business owners intend to hire new employees, compared with 30 percent of small business owners overall.
“Small businesses have a tremendous impact on our local and national
economies, with two out of three new jobs being created by small
businesses, and the countless product and service innovations they bring
to the marketplace,” said
Given how vital small business success is to both the national and local
economy, Capital One remains committed to understanding the challenges,
trends and perceptions that affect overall performance and day-to-day
operations. Capital One strives to understand the small business
landscape, in an effort to better serve its clients and customers across
the country. Follow along on
The findings reported in this release are from a telephone survey
conducted by the opinion research firm, APCO Insight, the global opinion
research division of communications consultancy, APCO Worldwide. APCO
Insight interviewed a nationally-representative random sample of 400
for-profit small businesses in the U.S., weighted to Dunn and Bradstreet
counts of all businesses nationwide by SIC code, employee size, and
geography. Small businesses are defined as those with less than
About Capital One
Capital One Financial Corporation
Alison Cahill, 917-653-7592