Business executives confident in their companies but not the economy
Businesspeople have more confidence in the short-term prospects for their companies than they have in the overall U.S. economy, according to a survey sponsored by a Southeastern regional bank.
Sixty-five percent of executives at companies with $10 million to 150 million in annual revenue expect their businesses to be in better financial shape in six months.
Nonetheless, fewer than half of respondents (48 percent) believe the overall economy will improve, according to the SunTrust/Radius Global Market Research survey.
Atlanta-based SunTrust Banks Inc. has a major presence in Virginia, with 230 offices and more than $17 billion in deposits as of June 30 last year, according to the Federal Deposit Insurance Corp.
A survey of smaller businesses (with annual revenue of $2 million to $10 million) produced similar results. Sixty-three percent of respondents were optimistic about their companies’ financial strength, but only 34 percent felt the same way about the national economy.
Among the larger companies, 48 percent of executives plan to stimulate growth by investing in new technology, while 34 percent will rely on purchasing/leasing new equipment and the same percentage expect to expand domestically and globally.
To finance their growth, 50 percent of respondents at these companies plan to reinvest earnings. More than 33 percent plan to use new or existing loans and lines of credit or get equity financing from investors.
The biggest challenges facing small businesses include changes in health-care laws and requirements (cited by 34 percent of respondents), increases in operating costs (another 34 percent), managing cash flow (31 percent) and new or increased competition in their industries (28 percent). Sixty-eight percent of small business executives believe they will be able to secure the capital they need to reach their 2014 goals.
The survey is based on interviews with decision makers representing about 500 small and mid-size businesses. The results have a maximum margin of error of plus or minus 4 percentage points at a 95 percent confidence level.