Small businesses have generally been on the receiving end of many of the economic improvements being made over the last several years, and that has put many of them in a far better position when it comes to expanding. That trend certainly seems to be continuing early in the new year even after the rough start companies in several parts of the country faced.
Today, about 37 percent of small business owners say that they’re “strongly optimistic” about their enterprises’ chances for success in the near future, compared to just 12 percent who are in any way pessimistic, according to the latest PNC Economic Outlook survey. The number of those with dour feelings is now actually at the lowest point seen since 2007.
The reason for these generally strong feelings is that 55 percent believe they’re going to get better sales numbers in the next six months, and 41 percent likewise believe their profits will be higher, the report said. Both those figures are the highest observed in two years.
“The harsh winter’s impact on the U.S. economy overall appears to be temporary,” said Stuart Hoffman, chief economist at PNC. “Now, pent-up consumer demand and continued support from the Federal Reserve are fueling the upbeat tone. These findings support our baseline forecast that the U.S. economic and jobs expansion should quickly bounce back this spring and propel what should be the economy’s best year since before the Great Recession.”
How will they proceed?
Over the next six months, close to two in five small businesses say they intend to raise prices, but those increases will be marginal, coming in at between 1 and 2 percent or so, the report said. Meanwhile, it should also be noted that many entrepreneurs now feel they no longer need to seek out any kind of financing; just 15 percent say they plan to try to obtain a new loan or line of credit in the next six months, down from 20 percent last fall. Meanwhile, 18 percent say it’s more difficult to get this kind of financing, compared with 17 percent who feel it’s easier.
Owners who want to make sure their companies are in a good financial position may want to consider the ways in which they can cut their expenses. For instance, finding more affordable small business insurance coverage including policies for professional liability insurance might help them to reduce their costs by thousands of dollars annually.