Confidence among small business owners has been declining since the beginning of 2023, and is at its lowest level since September 2020.*

When asked if they were confident about their business over the year to come, 40% of small business owners said yes – compared to around 45% at the end of last year, but up from around 20% in September 2020.

Looking ahead to the next five years, only 39% of business owners said they felt optimistic, while only 34% were positive about the next decade. Both figures have increased marginally over the last quarter.

But reactions were dependent on the size of business and the industry, with larger businesses more optimistic about the next 12 months. Companies in primary and secondary industries were the most positive about the year ahead, with businesses in consumer services the least confident.

Concerns around economic factors, supply chain issues and entrepreneurship are on the rise while other worries, including cash flow and business demand, seem to be dwindling, particular among businesses with a higher turnover. Staffing remains a mild concern, with small businesses with $500k to $2.5m likely to face the greatest challenges on that front.

The proportion of businesses reporting a negative impact from rising interest rates has increased over the last 12 months, with 41% reporting a negative impact, up from 35% in June 2022, though down from 43% in December.

Here are the top priorities for small businesses across the next 12 months, and how small business owners are focusing on growth, increasing cash flow and reducing unnecessary costs.