While there is a large amount of economic uncertainty in the U.S. these days, many small business owners think they’re doing well. However, they are typically not doing so well that they feel they’ll be able to increase payroll this year.
Today, roughly three in five small business owners feel their companies are performing as expected so far this year, but more than half say that the biggest challenge they will likely face this year is the prospect of increasing the size of their companies, according to a new survey from TD Bank. Another 45 percent say their largest concern is the economy, and more than one-third are concerned with cash flow.
As a consequence of all these issues, only 17 percent of small business owners say they’re planning to hire at least one employee before the end of the year, and that’s down from nearly one-third just six months ago, the report said. Fortunately for current workers, nearly out of five say that they don’t plan to cut any jobs, up from less than three in five owners who felt they could keep staffing levels more or less the same in December.
“It’s not surprising that small business owners still struggle to be optimistic or confident about performance in the current economic environment,” said Jay DesMarteau, TD Bank’s head of small business. “Business owners are telling us they want to grow and expand, but they aren’t ready to hire yet.”
In all, half of small business owners say that the ability to increase the size of their businesses would be the biggest opportunity they had this year, and that includes expanding services, getting more clients or customers, and increasing sales numbers, the report said. Of business which do not intend to hire, more than two-thirds said they would not engage in the effort even if their financial circumstances allowed it, as about half were worried about cost control and that there wouldn’t be enough work for these new employees. Another more than one-third also cited lower sales and revenues as a reason for this reticence.
Small business owners looking to expand their companies will likely face higher workers’ compensation insurance premiums as a result, and with costs for this type of coverage rising, many may need to carefully consider exactly how such a move will impact their finances.