The past few years have been very good to small businesses nationwide, as the economic recovery has put many in much better positions than many owners might have envisioned when the recession was in full swing. Now, though, it seems their attitudes toward many aspects of their companies are changing with their situations.
One of the benefits of this, at least for employees of small businesses, is that these companies are now being put in better financial positions, which in turn allows them to offer higher salaries, according to the latest data Economic Outlook Survey from PNC Financial Services. Today, about 38 percent of entrepreneurs say that they expect to be able to increase worker salaries over the next six months, marking the highest number seen since 2008. As recently as the spring, that number was at less than 1 in 3 owners, and on an annual basis, it was up from 22 percent.
Moreover, it seems that those employees are going to be in line for significant wage hikes, the report said. Of those who plan to put them into place, about 3 in 5 say that they’re going to be of at least 3 percent. That, in turn, might make independent companies more likely to attract and retain higher-quality talent.
Customers might pay for those raises
However, it should be noted that the same proportion of companies planning raises – 38 percent – are also planning to increase the prices for their goods and services, the report said. This is being done largely in an effort to offset rising costs in other aspects of their companies. Interestingly, 40 percent of those that plan such price hikes say that theirs will be in the 3 percent to 4 percent range, while 31 percent will keep them more modest, between 1 percent and 2 percent.
But these plans come at a time when 85 percent of owners say they’re optimistic about their companies, though that was down from 87 percent in the spring, the report said. In fact, 52 percent say that they expect that they will see sales increase within the next six months.
Owners who want to position themselves for as much success as possible might want to keep in mind that they should also be trying to keep their costs down. For instance, by finding more affordable small business insurance policies, including those for general liability insurance, they may be able to save thousands annually.