The recent past has seen many small business owners finally begin to expand operations, or at least attempt to do so, after years of dour outlooks brought on by economic uncertainty. And, while a number of projections show that some may think their companies could struggle to grow in the coming year, that seems not to mean that they won't at least try to hire new employees in the coming months.
This may be particularly true among companies with between one and 10 employees, owners of which seem to be fairly optimistic about the coming year, according to the latest SurePayroll Small Business Scorecard, which encompassed the final month of last year. Of those entrepreneurs polled, 70 percent said they were hopeful for the future, up from just 55 percent who responded the same way in December 2012.
"We saw a year of recovery in 2013. Seeing that optimism is higher going into 2014 gives us reason to believe small business owners are confident about the future, which typically results in increased hiring and growth," said SurePayroll chief executive officer and president Michael Alter. "Another sign of a stronger 2014 is the fourth quarter decline we've seen in 1099s [given to contractors, rather than full-time employees]. The slowdown in the use of independent contractors suggests small business owners may look to invest more in full-time hires in the year ahead. More full-time hires means more stability and more dollars available to spend on Main Street, hopefully propelling our economy forward."
Further, 73 percent of owners polled said they enjoyed better fourth quarters than they did a year ago, the report said, while 27 percent said they did worse.
A potential dark cloud
However, it should be noted that while owners seemed more optimistic about their chances for hiring, that was not reflected in current trends, the report said. December hiring was down 0.1 percent from November and pay to workers dropped 0.2 percent during that same period. Further, on an annual basis, hiring had declined 1.7 percent and paychecks dipped 0.3 percent through the end of the year. Among specific regions, only the South saw more workers being brought aboard by these smallest of small companies, for which hiring rose 0.7 percent; the Northeast, Midwest, and West all saw declines ranging from 4 percent, 3.2 percent, and 1.5 percent, respectively.
However, the South was not the only region where pay to these small business employees increased, rising 0.9 percent, the report said. The Midwest also saw an increase of 0.7 percent. On the other hand, paychecks were down 1.3 percent in the West, and 2 percent in the Northeast.
Owners who choose to increase hiring often do so as a means of helping to expand their companies, but this is usually a decision that should not be undertaken lightly. As a result, it might be wise for entrepreneurs to look at all aspects of their companies before making any final choices to ensure that they're ready for such a step, and that often includes taking the time to examine revenues versus expenditures. If the balance seems a little less stable than they might like, it could be wise to look for ways to cut costs company-wide as a means of shoring up their finances, and this could include examining small business insurance costs. For instance, shopping around for more affordable workers' compensation or errors and omissions insurance coverage can potentially save businesses thousands of dollars per year, which could then be put toward more pressing needs the enterprise might have.