Consumer Confidence Surges Despite Lingering Economic Challenges
According to the December 2023 consumer sentiment survey by the University of Michigan, American consumers anticipate a slower increase in inflation, with expectations dropping from 4.5% in November to 3.1% for 2024. This reflects increased confidence in the economy, as consumer attitudes towards the general economy improved by 13% after four consecutive months of decline. However, small business owners, as per the National Federation of Independent Business (NFIB), expressed more pessimism in November, with a 0.1-point decline in confidence. While 22% cited inflation as the main threat, down 10 points from the previous year, 44% faced challenges in filling positions despite robust job growth. The contrasting sentiments suggest differing perspectives between consumers and small business owners on the post-pandemic economy, with both groups, however, sharing concerns about inflation. Despite this, the data indicates an overall improvement in Americans’ confidence in their financial futures compared to the previous year.
Source: ASBN
SBA’s Pilot Program Empowers Historically Underserved Entrepreneurs
The Small Business Administration (SBA) highlights the success of its American Rescue Plan-funded Small Business Community Navigators Pilot Program, the largest-ever federal investment in navigator services for small businesses. The program, designed to assist historically underserved businesses, particularly those owned by veterans, women, and individuals from rural and minority communities, has delivered significant results. In less than two years, it has provided training to over 350,000 entrepreneurs and counseling services to over 33,000 small business owners across all 50 states, D.C., and Puerto Rico. The SBA estimates that the program will have secured at least $300 million in approved funding by the end of the pilot. Notably, 75% of small businesses reached had not engaged with the SBA in the prior five years. The program has effectively reached traditionally underserved groups, including Native entrepreneurs, veterans, and individuals with disabilities, with President Biden urging Congress to extend funding for this successful initiative beyond 2023. Participants in the program, including Administration officials and business owners, shared their experiences and expressed a commitment to continuing these vital services.
Source: The White House
Study Highlights Success Traits of Family-Owned Businesses
A recent study by McKinsey reveals that family-owned businesses (FOBs), defined by significant share capital or voting rights held by founders or descendants, exhibit higher profitability, efficiency, stability, and effective management compared to other types of companies. Between 2017 and 2022, FOBs generated average profits of $77.5 million and total shareholder returns of 2.6%, outperforming non-FOBs, which recorded $66.3 million in profits and 2.3% shareholder returns. McKinsey’s analysis indicates that FOBs represent 70% of the world’s GDP and 60% of total jobs, contributing to annual turnovers of $60 trillion to $70 trillion. The study identifies four critical mindsets and five strategic actions common among FOBs, emphasizing purpose beyond profits, long-term perspectives, financial conservatism, efficient internal management processes, active portfolio diversification, dynamic resource reallocation, high operational efficiency, talent attraction and retention, and continual governance review. McKinsey concludes that non-family businesses adopting these traits could achieve “sustainable and inclusive economic growth” similar to FOBs.
Source: Inc.
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