Celebrating the contributions of small businesses [WSJ/Vistage April 2024]

Each month, we share the insights of small businesses with the understanding that the sentiment captured in the WSJ/Vistage Small Business CEO Confidence Index predicts economic changes. This month, we see a slight decline in the overall Index, but the trend remains above last year.

This week, in honor of National Small Business Week, we recognize that in addition to their impact on the economy, small businesses also significantly impact their communities through philanthropic efforts. Our survey captured their specific efforts around charitable giving and found that small businesses give back in many ways.

While tax-deductible financial donations top the list, small businesses also engage in the community through corporate memberships to local organizations and sponsorships of different local entities. Small businesses often develop local relationships and can be more nimble in their decision-making about their philanthropic efforts.

With younger generations of workers having a deeper connection to giving back and working for purpose-based organizations, promoting charitable contributions could give small businesses an advantage in attracting talent. Contributions can also directly engage employees, creating opportunities for team-building events that benefit the community. Volunteering was reported by 40% of CEOs and employee donation drives by 17% of small businesses.

Employee impact: Driving engagement

When asked specifically about employee engagement, 28% of small businesses reported that community involvement was one of the tactics used.

There are other ways that small businesses boost their culture and engagement, including investing in the community of their workforce. Eight-in-10 small businesses reported employee development is a priority. Other top tactics include recognition and reward programs, and team-building activities.

Each of these tactics provides an opportunity to bring together workers as part of a tradition that encourages in-person connections for hybrid workers.

Workforce expansion lags

Looking deeper into the components of the Index, specifically at the year-over-year trends, plans for workforce expansion have the lowest year-over-year increase.

For the 7% of small businesses that are decreasing the size of their workforce, three factors drive these reductions. Market demand was the top reason reported by 32% of small businesses, 28% cite slowing demand, and 23% decided not to replace open positions.

Looking at revenue expectations, while it is notable that 60% of small businesses expect increased revenues in the year ahead, there are still 27% that expect flat revenues and 13% that expect declines. These businesses are still managing inflation, and as wages are the top inflationary impact, workforce expansion will continue to be tempered.

The April WSJ/Vistage Small Business CEO Confidence Index survey was conducted April 8-15, 2024, and the results reflect insights from 457 leaders of small businesses with $1-20 Million in revenues.

April highlights:

• Current Economy: 24% of CEOs believe the economy has improved compared to last year, while 32% think it has worsened.
• Future Economy: One-quarter of small business leaders expect the economy to improve in the next year, while 26% expect it to worsen.
• Revenue projections: 60% of CEOs expect increased revenues in the next 12 months, while 13% expect decreased revenues.
• Profitability projections: Less than half (46%) of small businesses expect increased profits in the next 12 months, while a growing proportion (20%) expect profits to decline.
• Fixed investment plans: Just over one-third (34%) of small businesses plan to increase investments, while 12% plan to reduce spending in the next 12 months.
• Workforce expansion plans: Just under half of small businesses (48%) plan to expand their workforce in the next 12 months, a 6 percentage-point decrease from March.

To explore the full April 2024 WSJ/Vistage Small Business data dataset, visit our data center or download the infographic.

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