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Survey Says Alaska Small Businesses Are Optimistic and Growing

Jun 4, 2024 | News, Small Business

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The Alaska Small Business Development Center (SBDC) says its 7th Annual Small Business Survey conveys a heartening shift towards optimism. Compared to 2020, respondents conveyed a clear rise in confidence and a strong desire for growth.

“The Alaska SBDC’s annual small business survey provides a unique insight into how Alaska’s small businesses are faring in today’s economy and what they expect for the coming year,” says Alaska SBDC State Director Jon Bittner. The survey contains insights from more than 700 local businesses.

Resilience in the Face of Challenges

New results from the 2023 Alaska SBDC Small Business Survey also highlight the increasing participation of women-owned and veteran-owned businesses. Despite ongoing challenges like workforce shortages and rising costs, more than half of the businesses project a positive financial outlook, demonstrating overall resilience and a strong foundation for future success.

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However, Alaska small businesses are not without their challenges. Respondents voiced several concerns: 

  1. Customer Acquisition and Retention: Securing a steady stream of customers remains a top priority, especially for those in remote locations or competing with national chains.
  2. Workforce Development: Finding and retaining qualified employees is another ongoing struggle, exacerbated by some industries’ competitive job market and seasonal fluctuations. 
  3. Threat of Inflation: Rising costs have been squeezing profit margins at the expense of  operational stability and growth potential.
  4. Access to Capital: Securing funding remains a concern. This year’s survey reveals a growing interest in alternative financing options like angel investors and crowdfunding alongside traditional bank loans.

Seen from a slightly different angle, the rising cost of inventory and equipment is a top challenge for 17 percent of those surveyed. Thirteen percent said operational costs are a major challenge, and 12 percent said finding qualified employees is a top challenge. 

When asked what they would use additional funding for, if they had it, 21 percent of business owners reported they were looking to pay for growth. Seventeen percent wanted funds for new equipment, and 14 percent sought funds to expand operations. Lagging behind but still noteworthy, 12 percent sought capital to develop new products or services.

Less than half of businesses reported success in obtaining funding. Traditional bank loans (27 percent) were the most sought-after source of additional funding. Government grants represented 14 percent of funding sought, and State Small Business Credit Initiative loans represented 16 percent of funding sought. Other business owners looked for alternative funding sources, such as the 22 percent seeking angel investors and crowdfunding. 

Overall, the 728 businesses that took part in the survey were positive about the financial future. Fifty-seven percent predicted the next year would be “good” while 33 percent expected a neutral financial future. They may have reason to be optimistic: 37 percent of surveyed businesses reported having higher revenue this year than last, and 29 percent saw increased profits. 

“According to the available data, the small business community across the state has shown remarkable resilience amidst several financial headwinds. The data suggest that small businesses are well-positioned to keep growing and expanding, thanks to their determination and optimism about the future,” the report states. 

Download the full report here: aksbdc.org/about/annual-reports/ 

Alaska Small Business Development Center

Alaska Business June 2024 cover
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Delivering Anchorage's Promise
June 2024
Welcome to the June 2024 issue, which features our annual Transportation Special Section. We've paired it this year with a focus on the Pacific Northwest and Hawai'i, as Alaska has close ties to both that reach far beyond lines of transportation. Even further out past our Pacific Ocean compatriots and our Canadian neighbors to the east, Alaska's reach extends to India and Singapore. Enjoy this issue that explores many of Alaska's far-flung business dealings.
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