The economic recovery has been under way for some time now, and to that end, many of the nation's small businesses are in a much better position now than they were just a few years ago. However, a number of issues still remain that threaten many independent enterprises across the country, and that has a large number of owners still feeling a little cautious about their chances for success in the coming year.
While nearly half of all business owners say that they have about the same level of optimism about their companies' future in the next 12 months as they did in 2013, close to three in 10 now note they're less optimistic than they were a year ago, according to a new survey from Wells Fargo and Gallup. Just 23 percent of those polled said that they're actually more optimistic. However, the good news is that the same poll conducted in 2011 about the chances for success in 2012 showed that the average entrepreneur back then was more dour. At that time, nearly a third of business owners said they were feeling less optimistic, while slightly more than one in five had a bright outlook, so it seems that the improvements are indeed coming, even if it's happening a little more slowly than many would like.
"Although there are some generally positive economic signs going into the new year, including the rise in the stock market and the general uptick in consumer confidence, small business owners evince mixed feelings about what 2014 will bring," the researchers wrote. "Slightly more say they are less optimistic than more optimistic now than they were headed into 2013. Their views on the operating environment for their small business in 2014 are similarly divided – although slightly more positive than two years ago."
Most feel fine about businesses themselves
However, it should be noted that most owners seem to have mixed outlooks about the companies' chances for success mostly because the current environment in which they are operating simply may not be conducive to growth, regardless of what they do, the report said. In terms of "operating environment," a quarter of owners feel as though it will be worse in 2014 than last year, and more than half think it will be more or less the same. In all, 12 percent cited the economy as the biggest challenge facing them, while 11 percent noted health care costs or the Patient Protection and Affordable Care Act weighed heavily on them. Another 11 percent also said that they were worried about the government in general.
"Some of small business owners' lack of optimism may be borne out of their concern about factors over which they have little direct control, including the economy, the government, and the implications of the rollout of the new healthcare law," the report said. "Other concerns are more direct, including basic issues that are part of their competitive environment such as their ability to attract new customers and to find and retain good employees."
In fact, attracting customers was the biggest internal concern cited – by 13 percent of owners – well ahead of cash flow and financial stability, which came in at just 9 percent, the report said. Another 7 percent each cited the cost of running a business and the aforementioned ability to find and keep good workers.
Owners worried about their financial flexibility might want to consider the benefits of shopping around for small business insurance coverage. Finding more affordable workers' compensation or general liability insurance can cut thousands of dollars from a company's expenditures over the course of a year.