The improving economy seen in the last few years has likely been a boon to many small business owners across the country, which has served to improve their optimism for their companies' futures. That, in turn, seems to have led to an increase in the amount of entrepreneurs who say they will increase business spending in the coming year.
Through the end of 2013's third quarter, 26 percent of small business owners say that they plan to increase spending at least somewhat over the course of the next 12 months, and that's up some 20 percent from the end of last year alone, according to the latest poll on spending plans among independent company owners conducted by Gallup on behalf of Wells Fargo, as part of their combined Small Business Index. That pulled the number of those planning to increase spending close to those who say they will cut it, either by a lot or a little, which stood at 28 percent in the most recent survey, down from 34 percent at the end of 2012. Meanwhile, the remaining 46 percent of owners polled said they had no plans to change their current spending one way or the other, unchanged from the previous poll.
Similar trends were reflected in spending over the previous 12 months, though these were not as pronounced as the previous numbers indicate the future might be, the report said. In all, 25 percent of owners say they increase spending either a lot or a little, while another 31 percent noted that they reduced it. The remaining 44 percent held it more or less steady. At the end of last year, only 18 percent of owners had boosted their spending efforts, while 40 percent had cut them.
"Small business owners are not only more optimistic overall about their operating environment this year, but also are becoming more likely to say they are putting money into their businesses," Gallup's Elizabeth Mendes wrote in discussing the results of the poll. "In fact, more business owners say they plan to increase their capital spending than have said so since early 2012. Whether they actually do so remains to be seen. Still, owners remain about as likely to say they plan to decrease capital spending as to increase it in the coming year. If the current trend continues, though, more owners will plan to increase spending than decrease it in the coming months."
Could trouble be ahead for small businesses?
However, the current positive feeling among owners might not be reflected outside their industries, the report said. Mendes further noted that there may be some troubling signs in the broader economy which could be restrictive to future business growth, as Americans are now getting a little less confident in the economic recovery. The Wall Street Journal, likewise, recently conjectured that declines in home sales and orders for durable goods seen in recent months could spell trouble for business investment overall going forward.
Better feelings about their chances for improving conditions over the next several months should not, however, prevent owners from looking for more ways to save their companies money, such as by searching for more affordable small business insurance. Looking into whether there may be more affordable options for coverage including workers' compensation or liability insurance may give companies a little more financial flexibility going forward, freeing up more cash to contribute to spending efforts that could help to grow a business overall. Researching all possible options in this area would likely help to improve many aspects of a company's finances going forward.