If you are a small business owner, you’re understandably concerned about the economy and where it is heading. After nearly two years of recession, tepid recovery and looming tax increases, some business owners are wondering if they have what it takes to survive for the long haul.
And survival is not guaranteed. While researching restaurants recently in various cities, this writer discovered that a number of once popular eating establishments had gone out of business over the past year. Look around you: your mall has empty stores and some of the people you’ve done business with for many years are doing something different or looking for work themselves.
Business Survey
The PNC Financial Services Group conducted a survey of small business owners to determine what their outlook is concerning sales, profits and hiring. PNC noted that the small business outlook has improved from a year ago, but also shared that many owners are skeptical about the country’s economic recovery. Importantly, few expressed interest in taking out a new loan or line of credit, usual signs that owners are bullish about their businesses.
Among the hopeful signs revealed from the survey is that 47 percent are expecting to see their sales increase over the next six months while 22 percent expect to increase their number of full-time employees. Both those numbers are up from surveys taken last fall and previous spring. PNC has been conducting biannual surveys of small businesses since 2003.
Weak Recovery
Stuart Hoffman, chief economist for The PNC Financial Services Group, Inc., noted, “These findings support PNC’s forecast that the U.S. economy’s ongoing ‘half-speed’ recovery will be sustained throughout 2010 and beyond. The missing ingredient in the recovery recipe is private sector job growth. We expect it to soon be baked into the mix, which will make the recovery more satisfying.”
Though the PNC survey showed that there is little interest in small business loans, that may have something to do with the difficulty business owners have in obtaining credit. According to an April 1, 2010 story appearing in “The Wall Street Journal,” small businesses who have been around for three years or less are finding it difficult to get a loan or a line of credit. Even when putting up large amounts of their own cash, start up businesses are finding that angel investors and banks are not jumping in.
New Jobs
In good years, more than 500,000 new businesses are hatched, creating 3.3 million new jobs annually according to the Census Bureau. With money tight, fewer businesses are getting started. And that’s leading to fewer jobs being created. Thus, the unemployment rate, which has been hovering around double-digits for some time now isn’t likely to drop.
And of course there is one huge, looming factor which has small business owners worried: the recently passed one trillion dollar health care overhaul. Some of the mandates do not kick in until 2014, but even now companies have to measure what the cost will be of hiring new workers. Those costs can tip the balance between hiring full time or part time or not at all.
Adv. — Are you considering starting your own small business? Why not take over an existing operation? The Novars Group can guide you; check out their business listings today.
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