Small businesses in communities across the United States are the engines of local economies. They represent more than 99.7% of all employers, accounting for 55% of all jobs and 54% of sales in the U.S. That’s a big deal!
In our first annual Small Business Pulse survey, Yelp tapped 900 small businesses to learn what this influential group is focusing on in the year to come. If we had to pick one word to describe the outlook of small businesses heading into 2016, it’s undisputedly “optimism.” In fact, 85% of American small businesses active on Yelp expect their revenues to grow, estimating an increase of 26% in 2016.
Startups and Restaurant Industry Expect Revenue Growth
We surveyed Yelp-listed small businesses from nearly every industry: food service, health and medical services, retail and home services...you name it. Small businesses in the restaurant industry are most upbeat about 2016, with 92% expecting an overall revenue increase. Young businesses are also feeling the optimism, predicting 48% growth on average over the next year.
Challenges Despite Optimism
While there is a clear measure of confidence in the year ahead, there is no question that small businesses face plenty of challenges too. Developing effective growth strategies and rising above competition are top of mind; specifically, attracting and retaining customers (60%), managing a limited marketing budget (32%), and competition from larger businesses (30%).
Digital Marketing Levels the Playing Field
Small businesses may not have the same resources as their bigger competitors, but “Feedback Economy” platforms like Yelp can level the playing field. Businesses and consumers can now directly engage, bringing together an online community that crosses geographic, economic and social barriers – and giving business owners the digital tools and confidence they need to stay competitive.
- 85% of small businesses believe digital marketing has helped grow their consumer base.
- 91% use digital marketing tools such as social media platforms (75%), consumer review platforms (48%) and search engine advertising (48%).
- 79% of businesses surveyed believe that digital tools allow them to provide a more personal touch in their communities, enabling them to address the individual needs of their customers.
Yelpers Rock the Vote
Politically, small businesses share the same concerns as large businesses: reducing the regulatory burden and simplifying the tax code, which could make the process of filing taxes faster and easier for small businesses. They want changes that would allow them to focus on core business issues and grow in 2016.
Good Vibes for 2016
Yelp small businesses have a clear message heading into 2016: the recovery is over -- it’s time to grow, baby, grow! As the economy continues to improve and new digital tools emerge to connect with existing customers and reach new ones, small businesses are poised for a great 2016.