The improving economy seen over the last year or two has put many small business across the country in significantly improved financial positions, and as such revenues are rising for a large number of these companies. With that positive, however, comes a potential negative: greater tax liabilities.
In all, 57 percent of small businesses nationwide said that they paid more in taxes this year than they did in 2013, but at the same time, it seems as though 60 percent had higher revenues over the previous year, which would account for the uptick in their bills from the Internal Revenue Service, according to the latest SurePayroll Small Business Scorecard. About one in three independent enterprises across the country reported that their revenues were up 15 percent or more, but only 20 percent saw their tax costs go up anywhere near that much.
As such, many independent owners say that they’re pretty optimistic overall, with nearly seven in 10 noting that they believe the small business economy in particular is moving in the right direction, up from 65 percent in January, the report said. However, hiring hasn’t really picked up – it fell 0.1 percent on a monthly basis – and the average paycheck pulled by workers at these companies likewise fell by that much.
What else are owners doing?
One of the many issues that many entrepreneurs across the country are still facing these days involves a lack of access to credit, the report said. To address this problem, and theoretically put their companies in a better position to expand and become more competitive, many are now turning to alternative lenders instead of traditional financial institutions. In all, 86 percent who have done so say they had a positive experience and would work with such companies again. Just two years ago, only 13 percent of companies used these sources of funding, and 60 percent still relied on traditional banks to obtain the money they needed.
Owners who are looking to improve their companies’ financial positions even further might want to take the time to find more affordable small business insurance. Cutting costs for coverage such as liability insurance could go a long way toward improving a company’s standing, by potentially saving them thousands of dollars per year, which could then be put toward other aspects of the company.