The recovering economy has been a boon for many small business owners across the country, but now it seems that the ways in which they're taking steps forward seems to have served as a major encouragement about their chances for success in the future as well.
Through the end of last year, the small business optimism index stood at a reading of 93.9, up slightly from November's 92.5 rating but still somewhat below the 94 level seen around the middle of 2013, according to the latest data from the National Federation of Independent Business. Those numbers are still below the pre-recession average of about 100. However, those improvements came as a result of better feeling in specific parts of small businesses being able to improve their outlooks, such as a nine-point improvement in hopes for job creation, which was the largest seen from one month to the next since February 2006.
"While there has been no sign that a real recovery has begun, we can be encouraged that the economy is at least crawling forward and not heading in reverse," said NFIB chief economist Bill Dunkelberg. "Some segments of the economy are showing improvement (manufacturing, construction, professional services), but consumer spending, especially on services (70 percent of consumption), has lagged. Spending on items such as automobiles has certainly increased, however a corresponding rise in hiring has not yet materialized."
Some changes weren't positive
Of course, to offset the stronger feeling in some areas, owners also had to be a little more dour about other aspects of their companies, and these came largely for plans to increase certain aspects of their businesses in the coming months, the report said. For instance, there was a drop of two percentage points in plans to increase inventories, as about 2 percent now expect them to actually fall. In addition, only 8 percent of owners have plans to increase employment, and that's down from 9 percent in November. Finally, 5 percent said they have lower inventories now than they did in November, down from 4 percent a month earlier.
Owners worried about their abilities to expand their companies in the coming months might want to examine how their enterprises are spending money over the course of the year. Shopping around for more affordable small business insurance – such as liability insurance, for example – can help entrepreneurs save thousands of dollars annually, and thus improve their bottom lines.