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57% of small businesses are optimistic about 2022. Should they be?

by 
Cory Shrecengost
March 18, 2022
3
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In 2022, small and medium businesses (SMBs) are finally feeling confident about the road ahead. Our January 2022 study found that 57% of SMB owners and leaders say their net business outlook for 2022 is optimistic, far surpassing the 21% that are pessimistic.


But is this optimism founded or are SMBs suffering from optimism bias—the tendency to overestimate the chances of positive experiences and underestimate the chances of negative experiences?


It’s a critical distinction to make because leading with blind optimism can result in poor decisions and overspending that SMBs often can’t afford—especially at a time when 35% of SMBs say overcoming previous losses is their top sales goal in 2022.


So, are SMBs right for feeling positive about 2022? And what changes do they plan to make in response? We set out to answer these questions and more by partnering with research agency CensusWide to survey 1000+ SMB owners and leaders. And we uncovered some fascinating insights into how SMBs are thinking, reacting, and planning for the year ahead. Here’s what we found out about their optimistic moves for 2022.


Sales goals are practical, not ambitious

After years where organizations were forced to adapt to near-constant change, many SMBs are taking a conservative approach to sales for 2022. Overcoming previous losses and stabilizing the business are the top sales goals for SMBs in 2022, both coming in at 35%.


So, while the outlook remains bright for SMBs, it’s clear that businesses are remaining cautious. Small business expert Ramon Ray believes a practical approach to uncertainty is the main reason SMBs remain conservative in their sales goals:


“Even though SMBs are optimistic and can see a path forward, even though they think ‘I’ll be okay,’ there’s a practical understanding that sales will likely be less in 2022. SMBs know that challenges will likely come up and so they might lower their numbers a bit. And if they’re wrong, so what, they’ll be pleasantly surprised.”


SMBs are prioritizing internal investments

For small businesses, a renewed sense of optimism looks to go hand-in-hand with how much better equipped they are to manage disruptions and change.


Substantial investments in digital technology during the pandemic helped them to weather the storm, and now, they’re turning those investments inward—to unlock greater business efficiencies. Our research showed that SMBs are refocusing on operational technology to unlock productivity gains with 36% listing “increased productivity” as the top motivation for new technology investment.


This pivot to operational technology looks to be part of a wider push to embrace a new digital culture. And after laying the foundation over the past two years, SMBs are feeling optimistic about ramping up the transformation throughout 2022.


Talent shortages are a cause for concern

One area where SMBs aren’t feeling as confident, however, is sourcing and hiring talent. 2021 was characterized by labor shortages across the world. And all signs point to an even more competitive job market in 2022.


Our findings show that SMBs are responding to this shortage by doubling down on hybrid and flexible working options. Remote work topped the list of preferred strategies for attracting and retaining talent in 2022, and flexible working arrangements are the main method SMBs are prioritizing.  


Many employees got their first taste of remote or hybrid work during the onset of the pandemic. And it’s clear that SMBs will have to adapt their hiring strategies and deploy virtual-first approaches to cater to changing demands.


Want more insights? Read the full report

In the full report, we lay out the data from over 1000 SMB owners and leaders, then call upon leading voices from across the SMB world to share their insights, knowledge, and predictions on how new trends, challenges, and business strategies will impact and shape businesses in the coming year.


Find out how your 2022 plans match up with your peers. Read the full report.

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