The latest Freedom Economy Index survey, a joint poll of 70,000 small businesses by PublicSquare and RedBalloon, reveals that small business owners are holding steady and locking down expenses after a challenging 2023. While wrong-track sentiment dropped slightly from November highs, a staggering 70% of owners say their workers are 'falling behind financially' in the current economy. The data underscores the toll of last year's headwinds, including high inflation, aggressive interest rates, and a tight labor market.
Michael Seifert, CEO of PublicSquare, acknowledged the challenges but expressed optimism: 'Despite all of the bad news in 2023, Freedom Economy businesses stood firm...Their resilience causes optimism in me as we kick off 2024.' The survey found that over a third (37%) of small businesses had to take on more debt to survive, while just 10% reduced their debt load. Holiday sales also disappointed, with 60% reporting Christmas activity below expectations.
Andrew Crapuchettes, CEO of RedBalloon, saw a 'glimmer of hope' for those who persevered: 'They've weathered high inflation, aggressive interest rates, and a tight labor market. Those that survived will be stronger moving forward.' Looking ahead, most plan to rein in spending, with 80% holding off on major capital purchases and nearly half cutting business travel. While recession fears have eased from their peak, over 90% still believe the country is on the 'wrong track.'
In this uncertain climate, 65% of small firms intend to maintain current staffing levels rather than hire or reduce headcount. The survey captures the resolve of America's small business community after a brutal year. Though challenges remain, owners are cautiously positioning themselves for calmer waters in 2024 by controlling costs and debt. Their perseverance could catalyze a broader economic stabilization, underscoring their importance to local communities.
For HR vendors, this trend suggests that demand for cost-effective workforce management solutions may remain strong, as small businesses focus on efficiency over expansion. The emphasis on maintaining staffing levels indicates a steady market for HR technology that helps optimize existing talent, such as performance management and employee engagement tools. Additionally, the financial strain on workers highlighted by 70% of owners points to a need for benefits and financial wellness programs that can support employee retention without adding significant costs.
The full survey data and methodology can be found at PublicSquare's Freedom Economy Index page and RedBalloon's survey results.
