Now that the holidays are behind us, ‘tis the season to plan out our 2015. With uncertainties ranging from plummeting gas prices to the effectiveness of a deeply divided federal government, the business climate could be naughtier than it is nice.
So should you be hunkering down, or should you be investing in new growth? We’ve got some timely research to help out!
Using SurveyMonkey Audience, we surveyed more than 600 business owners and managers to get their outlook on 2015. It turns out, more than 90% expect their revenues to grow this year, but they also think that external challenges (like the economy) are the biggest potential issues.
Business owners’ cautious optimism about 2015 may mean that they feel the economy is less likely to pose problems than it has in the recent past. Here are three reasons why folks are optimistic—as well as a closer look at the results of our study.
1. Quantitative easing up
In reaction to the Great Recession of 2008-09, the Federal Reserve put in place an experimental new policy known as quantitative easing, or QE, to help stabilize the marketplace.
The goal of QE was to lower interest rates and boost bank investments by flooding the bond market with billions of Federal dollars. This policy has been implemented three times since 2009 and, as of mid-November, it was announced that the program will be coming to a close. The ending of QE means the Fed believes the economy is strong enough to move forward without extra help.
Some are even encouraged by this development because they believe that QE was a harmful policy and that “the flood of cash…encouraged reckless financial behavior” (The Economist). The end of QE paired with the Federal Reserve’s plan to leave interest rates low for a considerable portion of 2015 further bolsters a positive outlook for the New Year.
2. The pie is growing overall
By looking at the volume of goods and services that are bought and sold, Gross Domestic Product, or GDP, is a bellwether for a nation’s economy. According to GDP measurements over the last four years, the U.S. GDP growth can be charted at a 2.68% average. But even without final 2014 numbers, the U.S. GDP has already shown growth between 2013 and 2014 of 3.4%.
While there is concern that Q4 growth rates have slowed significantly in comparison to Q2 and Q3, some analysts like David Payne at Kiplinger.com are saying: “It is not uncommon for several strong quarters to be followed by a weaker one” and that looking forward to 2015, GDP growth is “still on an upward trend and will contribute to solid growth next year.”
3. Unemployment is headed south for the winter
At the bottom of the economic downturn in 2009, there was a staggering unemployment rate of nearly 10.8%, according to the U.S. Bureau of Labor Statistics. This meant a lot of people had a lot less money to put back into the economy. According to reports this week, unemployment figures have fallen all the way to 5.6%, which is good news for the economy.
While some think that “the unemployment rate…is as low as it can get without generating dangerous wage inflation,” (Bloomberg) there is little evidence that this has occurred yet. Despite these concerns, there is no denying that the steadily decreasing unemployment rate is good for businesses and consumers and acts as another sign pointing to a promising 2015.
2014 in review: A year of solid growth
Of the 607 managers and owners we polled, only about 15% reported that their business’s revenue shrank over the course of 2014—and just 6% saw their revenue decrease by more than 10%. These numbers indicate that 2014 turned out well for most businesses:
Over 90% of those surveyed expect the 2015 business climate to drive varying degrees of revenue growth. Growth can be a difficult process to achieve under the economic conditions of the last few years, and the fact that most survey takers believe they are headed in this direction is another good sign.
Between positive economic trends and the confidence businesses demonstrated in our survey results, that there is reason for optimism in 2015!
So how can you improve your outlook?
Whether you’re trying to battle a tough economy or a burly competitor, keeping your customers front and center can help you retain them through thick and thin. Research in the Harvard Business Review even showed that asking your customers for feedback (even if you don’t act on it) can improve loyalty.
Our internal studies bolstered these findings: 83% of businesses who measure customer satisfaction view themselves as successful. And businesses who use feedback methods like Net Promoter® scores (NPS) often see an impact—they’re a third more likely to see growth rates of over 10% a year: