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Despite continued uncertainties about the bottom-line impact of tariffs, and lingering doubts about the economy’s health, polls have shown small business owners’ optimism has risen since the the beginning of the year. Now, new data indicates the confidence of more recent founders is even higher than the generally improving outlook of more established entrepreneurs.
The upbeat expectations of relatively newer small business owners were captured in a recent survey by email, social media, and digital marketing platform Constant Contact. Its polling of nearly 1,600 entrepreneurs showed founders who launched their companies within the last two years expressed higher levels of optimism about growing their businesses over the next three months than the average of all survey respondents. Leaders of those younger firms were also markedly more confident about the near-term future than respondents whose businesses have operated for a decade or more.
For example, while 29 percent of all participating founders said they expected to increase headcount in the next quarter, 41 percent of those who launched their companies less than 24 months ago said they planned on hiring within that period. By contrast, just 21 percent of business owners with 10 years’ experience or more thought they’d be able to hire new employees over the next three months.
Moreover, 76 percent of business owners who launched less than two years ago and now have 100 employees or more said they plan to make new hires in the next three months. According to Constant Contact CEO Frank Vella, more recent entrepreneurs’ higher confidence partly reflects the vigor and positivity of leaders whose companies are still benefitting from early-stage growth.
“For many this optimism isn’t just a feeling; it’s a reflection of their current growth trajectory,” Vella told Inc. in emailed comments. “Younger businesses are more likely to be hiring, and this rapid scaling imbues a greater confidence in their current position and trajectory. Many of these business owners are highly ambitious as well. They are actively scaling and investing in their future, which naturally fuels a more positive outlook.”
Those upbeat views were also evident in respondents’ optimism about how they think their companies will perform over the next three months.
While an average of 31 percent of all participants said they were “extremely confident” about how their business will fare over the next quarter, that figure rose to 41 percent among owners who’ve been in operation less than two years. It was even higher — 60 percent — for members of that more recent cohort with 100 employees or more. It then dropped to less than a quarter of entrepreneurs who launched more than a decade ago.
Those differences in outlook, Vella says, may come down more recent founders still having the greater flexibility of younger companies to react the various business and economic challenges all small companies are confronting.
“They were likely founded in the midst of the current economic landscape, which is defined by supply chain issues, rising prices, and general uncertainty,” Vella explained. “Because of this, their business models, supply chains, and marketing strategies were built from the ground up to withstand this volatility…They are accustomed to doing more with less and can adapt their plans without the inertia that can slow down a more established company. In this way they aren’t reacting to a ‘new normal’; this environment is their normal. That makes them structurally better positioned to navigate it.”
That pliability of smaller businesses may also explain why their owners’ optimism of starkly contrasts the more somber views of corporate leaders. For example, the reading of the most recent Conference Board’s Measure of CEO Confidence survey came in at just 49 points — still in negative territory, despite a 15-point boost over the previous poll.
By contrast, the National Federation of Independent Business’s recent monthly surveys have shown the confidence of member entrepreneurs steadily rising this summer. Constant Contact’s survey confirms that optimism among entrepreneurs, even as tariff and economic uncertainties weigh more heavily on corporate CEOs.
Indeed, it found nearly a third of respondents saying now is “an extremely good time” to launch a new product. Meanwhile, nearly a quarter said they considered current market conditions beneficial for growing their companies by opening new physical locations.
Asked if the higher optimism of more recently launched business founders might reflect an insouciance or naivete that more established business owners may have lost through the experience of tough times, Vella said he instead views their confidence rooted in their success in meeting today’s challenges.
“These business owners haven’t experienced a more stable economic climate to compare today against, so they are less focused on what’s been lost and more focused on the opportunity directly in front of them,” Vella said. “So, rather than being naive, I’d say they are inherently adapted. They’ve built their businesses for the world as it is today, and that’s a powerful advantage that fuels their confidence and their capacity to grow.”
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Bruce Crumley
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