Have you started to feel the positive effects of the economic recovery? What recovery, you may ask. Well, you are not alone. A recent survey of small business owners (loosely defined as privately-held companies with revenues under $20 million) indicates most are not feeling the effects of an improving economy. How does this resonant with you and your business?
A September survey conducted by the Wall Street Journal and Vistage International of companies nationwide with revenues of $1 million to $20 million indicates that about 47% see the current economy improved compared to one year ago while 45% feel it is the same and 8% feel it is worse. Sentiments for the upcoming twelve months, however, are not encouraging. Only 30% feel the national economy will be better while 55% feel it will be the same and 15% think it will be worse.
SALES REVENUES AND PROFITABILITY
Encouragingly 73% see their revenues increasing, 22% see them staying the same and only 5% feel they will fall during the next twelve months. There is not quite as much optimism regarding profitability, however, with 55% saying profits will be better, 35% the same and 10% feeling they will decrease.
Over half the respondents feel they will increase their employee count over the next year while about one-third say they will have the same number and only 6% will have less. For the past several years I have felt that once the economy began to turn positive business owners would be slow to hire. For one, many of them went through two, three, or more phases of painful downsizing to get their company “right-sized” and they do not want to hire back too fast. I say painful because many small businesses are like a family and it is painful to relieve someone of their job who has been with you for 20-30 years. Another reason I feel caution will be exercised in increasing a company’s labor force is technology. What technologies have been introduced into the marketplace since the downturn began five years ago that enables a company to increase its efficiency without a human being?
RISKS AND UNCERTAINTY
The Hartford’s 2013 Small Business Success Study, which surveyed 2,000 small business owners, indicates small business owners may be more conservative over the next twelve months. The four major risks to their business they feel are:
1) Slow economic growth (59%)
2) Taxes (42%)
3) Health care costs (40%)
4) Uncertainty with federal regulations (30%)
Regarding the Affordable Care Act about the same amount feel it will have a negative impact on their business (41%) as feel it will have no impact (38%). Those thinking it will have a positive impact represented 18% of the respondents.
How are you feeling about 2014? Do the risks above resonate with you, too?
Consider Reading This
The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change by Stephen Covey. Written in 1990 and still applicable today Covey shares “principles that give us the security to adapt to change and the wisdom and power to take advantage of the opportunities that change creates.” The book has sold over 15 million copies in 33 countries so there is something about it that appeals to its readers who find applying its core value principles to their business and personal lives rewarding.