Over the last few years, small business owners have seen some slow but steady improvements in their industry that put them on better financial footing. However, these improvements have certainly not been uniform, and that might be one reason that confidence among these entrepreneurs took a bit of a step back last month.
In all, the small business optimism across the country declined somewhat, and fell to a rating of 95.3, down from 96.1 in August, according to the latest data from the National Federation for Independent Business. That’s down from the pre-recession average of 100.3, seen from 1973 to 2007, and the numbers indicate that the areas that lead to the most growth in small businesses were the ones that took the biggest tumbles.
What are the biggest issues?
Through the end of last month, 21 percent of owners said they had job openings they couldn’t fill, and while that number was down from 26 percent in August, that’s still far too high for experts to be comfortable, the report said. Meanwhile, in terms of plans to make capital outlays over the next three to six months, only 22 percent of owners said this was in the cards for them. That was down from 27 percent a month earlier.
“Small businesses just can’t seem to get out of second gear,” said NFIB chief economist Bill Dunkelberg. “In order for the Index to get back to the average, responses to the 10 Index component questions would have to improve 50 percentage points cumulatively. That’s a lot of ‘positive’ responses to makeup to get back to ‘average’ much less reach a level that means a solid recovery. A decline in job openings and capital spending plans were primarily responsible for September’s Index decline. Overall, small business owners are still stuck in a rut that has been difficult to escape.”
On the other hand, there were areas of growth. More businesses planned to increase inventories, the report said. Further, 13 percent said that now is a good time to expand, up from 9 percent a month earlier.
Owners who want to position their companies for success may want to consider the ways in which they can cut their ongoing costs. This might include finding more affordable small business insurance coverage, including policies for general liability insurance, to potentially save thousands of dollars per year.