The National Small Business Association (NSBA) recently released the 2013 Year-End Economic Report. The report involved a survey of 1,395 small business owners representing every state and covers a multitude of industries.
What Does the Report Say About the Future?
This year’s report is a departure from previous years as it indicates a more optimistic outlook among small business owners. While the report doesn’t predict the future of small businesses, it simply gauges the outlooks of various small business owners regarding the future.
The 2013 Year-End Economic Report revealed that despite past struggles to obtain financing through traditional loans, a reluctant buying public, uncertainty about healthcare laws (and implementation), and chaos in the government (otherwise referred to as gridlock in the Capital; business owners are finally beginning to see a light at the end of the tunnel.
For instance, 48 percent of small business owners believe their businesses are better today than five years ago. This is an improvement of 8 percent compared to the 2013 Mid-Year Economic Report and the highest of any report since the NSBA began conducting the survey.
Another positive sign the report discovered is that 27 percent of small business owners anticipate economic expansion in 2014. Only 14 percent of business owners had that expectation in the beginning of 2013.
What is Weighing Heavily on the Minds of Business Owners?
It’s not all sunshine and roses. Many small business owners are reluctant to go on full scale hiring sprees and remain highly risk-averse. It’s great news that 66 percent of small business owners express some degree of confidence in the futures of their businesses. However, that least one of every three small business owners unsure about the future of his or her business.
Much of the uncertainty relates to things that are beyond the control of business owners. Yet these things weigh heavily on the minds of business owners and have a tendency to become self-fulfilling prophecies for business owners.
Topping the list of small business owner concerns are the following:
Reluctant customer spending
Cost of health insurance benefits
Federal taxes/state and local taxes
21 percent/12 percent
It’s also worth mentioning that D.C. gridlock, lack of available credit, and the growing national debt also represent large concerns of business owners at 19, 19, and 16 percent respectively.
Lesser concerns worth mentioning include:
- Lack of skilled/qualified labor
- Employee salaries
- Technology costs
- Employee benefit costs
- Foreign competition
- Training costs
The future is much brighter, according to nearly half of all small business owners. However, there is plenty of uncertainty remaining. Despite growing optimism for the future, 41 percent of small business owners are concerned that inflation will be an issue for their businesses in 2014 while 36 percent are concerned about rising interest rates and the impacts they will have this year. The bottom line is that businesses are cautiously optimistic and that is an improvement.