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Yelp’s Small Business Pulse Survey: Millennials, Minorities Most Optimistic About Small Business Growth in 2017

Last year we launched Yelp’s first annual Small Business Pulse survey, exploring the concerns and hopes of small business owners in America. This year, in our second annual poll, we tapped over 1,100 Yelp-listed small businesses across industries to dig into issues they face and opportunities they see for the new year, and to get a better look at what makes these folks – representing half of all private sector jobs and 99.7% of all employers in the U.S. – tick.

American business owners are optimistic about what 2017 has in store. Nearly 90% of respondents to our survey – small businesses that are active on Yelp –  expect their business’ revenue will grow in 2017 by an average of 31%, showing increased optimism from last year. According to our survey, Millennials and minorities are most optimistic about 2017. On average, Millennial respondents project over 69% more revenue growth than their older counterparts for 2017, and minority-owned businesses project 49% more revenue growth than white-owned businesses for 2017.

Looking back at 2016, while many Americans may be glad it’s in the past, the majority (68%) of Yelp-listed small businesses feel their business’ performance met or exceeded expectations last year. With one of the biggest events of the year being the election, we were curious about how it may have impacted American businesses. Interestingly, white business owners were 28% more likely to say the political climate in 2016 had a negative impact on their business than minority business owners. Also, Millennial respondents were more likely to say the 2016 political climate had a positive effect on their business compared to other age groups, while Baby Boomers felt, on average, it had a more negative impact.

Speaking of politics, there are many topics being debated that could impact small businesses, such as healthcare reform, minimum wage and tax restructuring. We asked respondents what they feel should be the top focus for President-Elect Trump in order to support small businesses. The most popular responses were reducing regulatory burden for small businesses (44%), followed by reducing the complexity of the tax code (31%) and ensuring small businesses have access to capital (28%). It’s clear that often times small businesses often find it time consuming and complicated to deal with regulations, and local policymakers can ease the burden by making regulations more efficient. Yelp has been part of such efforts, like our collaboration with Professor Michael Luca, his colleagues, and the city of Boston to focus restaurant health code inspections toward restaurants that are most likely to have a violation.

While businesses are generally optimistic about 2017, respondents did cite their biggest perceived challenges to grow for the New Year. The majority of businesses (57%) said attracting and retaining customers is going to be their biggest challenge, followed by managing a limited marketing budget (35%), competition from larger businesses (31%), and attracting and retaining employees (25%).

Nearly all respondents (96%) report they collect customer feedback in some form. Two in three businesses (68%) collect feedback from online review sites such as Yelp and TripAdvisor, though that number varies depending on the business category:

  • 82% of restaurant and foodservice collect feedback from online review sites
  • 71% of health and medicine collect feedback from online review sites
  • 68% of home and local services collect feedback from online review sites
  • 63% of shopping/retail businesses collect feedback from online review sites

Although last year’s survey found that 74% of business owners use social media as a digital marketing tool, this year we discovered that just 2% percent of business owners report gathering customer feedback from social media sites like Facebook or Twitter.

Methodology

The Yelp Survey was conducted by Wakefield Research (www.wakefieldresearch.com) among 1,191 Yelp-listed small businesses between December 6th and December 16th, 2016, using an email invitation and an online survey.

Results of any sample are subject to sampling variation. The magnitude of the variation is measurable and is affected by the number of interviews and the level of the percentages expressing the results. For the interviews conducted in this particular study, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than 2.8 percentage points from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample.