The decision by lawmakers to temporarily shut down the federal government hurt small businesses significantly at the time, and it seems that the impact was still felt even after the impasse came to an end. Owners of these enterprises ended October far less optimistic than when the month began.
In all, the Small Business Optimism Index dropped 2.3 points to a rating of just 91.6 through the end of October, down from 93.9 in September, according to the latest survey from the National Federation of Independent Business. This change came as owners became far less hopeful for their chances to hire and for small business conditions in general in the coming months, but overall seven of the 10 components of the index took at least some kind of hit. Nearly two in five cited the current conditions in Washington, D.C., as the reason they've lost so much optimism.
"Washington paralysis is never good news for the economy, so it was no surprise that while politicians were arguing over whether or not the government should remain fully operational, small-business optimism measures deteriorated," said NFIB chief economist Bill Dunkelberg. "Small employers are not fooled by headlines announcing record high stock market indices; everyday they live the economic realities of over-regulation, increased taxes, weak sales and a government without any direction or plan for the future."
Dunkelberg added that the current level of the index is now eight points below the average seen over the 35-year period ending in 2007, the report said. Further, he noted that it should be much higher considering the economy is in recovery mode.
Currently, 21 percent of those owners polled said that their biggest problem in running their businesses today are government requirements and red tape, while 20 percent cited taxes, the report said. Another 17 percent said they were suffering from poor sales. However, another major area of worry was the cost and availability of small business insurance policies, which was cited as a primary concern for 8 percent of owners surveyed.
Entrepreneurs who want to avoid the potential problems that come with large insurance bills for their companies may want to consider the ways in which they might be able to shop around to find more affordable plans. Cutting costs for coverage like workers' compensation or general liability insurance can go a long way toward shoring up a company's standing.