(Stacker) – Nearly three-quarters (73%) of American small business owners are optimistic about their economic viability in 2025, according to NEXT Insurance research. Despite challenges such as rising business costs and changing consumer trends, the economic outlook paints a complex picture of adaptability and vulnerability.
NEXT surveyed 1,500 small business owners ages 18 to 64 from different industries and regions in late October and November 2024 to reveal how economic factors are shaping business in the new year.
NEXT
Optimism about the economy and business viability
The NEXT economic study reveals a complex view of the economy. 57% of those surveyed say that the economy is weaker than a year ago. This mood highlights current challenges, such as Inflation, unemployment and unpredictable market conditions. that affect companies nationwide.
At the same time, the data shows diverse perspectives among owners about the viability of their small business. While 27% are not at all optimistic about the future of their business, approximately 3/4 of entrepreneurs report that they are very optimistic (23%), optimistic (26%) or cautiously optimistic (25%) about the viability of their business. business in the future. next year.
NEXT saw similar bullish thinking about business owners. expected profits in the first six months of 2024.
NEXT
The challenges that shape a business
NEXT’s survey highlights several challenges that may be shaping a company’s prospects for the future. Rising costs have forced 17% of companies to increase prices in the last six months. Another 15% reduced operating costs.
Some industries, such as technology and healthcarehave shown resilience due to the demand for innovation and essential services. But others, such as retail and hospitality, are more vulnerable to fluctuations in consumer spending and labor shortages.
For example, an Intuit holiday shopping report reveals that 23% of consumers They are reducing their vacation expenses due to rising costs of staples like food and gasoline. This holiday season, consumers plan to spend an average of $294 at small businesses, compared to $485 last year, a 40% decrease.
While NEXT data found that 12% of respondents closed all or part of their business, these closures were outpaced by growth. 10% say they have expanded their products or services and another 7% opened a second location for their business.
NEXT
Resilience and response to economic factors
Despite the difficulties, many business owners remain firm: 17% do not expect major changes in the next six months.
And as planning begins for the first half of 2025, business owners are thinking about growth.
Some entrepreneurs will focus on expansion: 14% plan to launch new products or services and 8% prepare to open second locations. These proactive efforts indicate confidence in the economy and market potential.
Cost management will also play an important role, with 12% of companies increasing prices to offset increased expenses and 11% expecting to reduce costs in the coming months.
However, not all companies are so confident in their resilience; 12% are concerned about a possible closure due to persistent financial difficulties.
Opportunities for small business growth
Regardless of the economic climate, companies can focus on innovation strategies to propel themselves forward, such as Embrace emerging AI technologies.diversifying products and servicesand protect your investment with business insurance to help mitigate the risks of growing a business.
Small businesses can meet long-term economic challenges by remaining flexible and preparing for the unexpected to build a solid foundation for success.
this story was produced by NEXT and reviewed and distributed by Stacker.
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