The National Small Business Association (NSBA) released its annual 2011 Year-End Economic Report on Wednesday. The report shows that small business owners are the most optimistic they have been in a quite a while about the future of their enterprises.
“Despite some cyclical ups and downs we’ve seen in the past several years, this report indicates real growth for the small-business community,” said NSBA President Todd McCracken in a statement released on the same day as the report. “Although we are far from where we need to be, it appears that small businesses have turned an economic corner.”
A number of key positive findings in the report support McCracken’s assessment:
• 75% of small business owners said they are confident about the future of their own business, up from 64% six months ago as reflected in the NSBA’s mid-year report and representing the highest level of confidence reported in three years
• The percentage of business owners who anticipate a recessionary economy is less than half of what it was just six months back, down from 30% to 14%
• 47% expect growth in 2012, while 17% report their business is already growing
• And while the number of business owners who reported increasing their number of employees remained stable, there was a slight drop in the number of them who reported decreasing their workforce from 26% to 23%―the lowest level in more than three years. “Taken in context of the last three years and the ongoing economic slump, these employment numbers show some progress and a trend of moving in a positive direction,” the report states.
Conducted online from December 19, 2011, to January 9, 2012, among 450 small-business owners representing every industry in every state in the nation, the survey also sought clarity from respondents as to what specific challenges they face with respect to future growth. Economic uncertainty at 66% was cited as the number one threat to the expansion and survival of today’s small businesses, while regulatory burdens ran a close second at 40% (up from 31% six months ago). The decline in consumer spending (39%), cost of benefits (34%), the growing national debt (24%), lack of capital (21%) and taxes (19%) also ranked in the minds of many respondents.
When asked which issues should be of utmost importance to policymakers as they strive to address the concerns of small-business owners moving forward, reducing the national deficit ranked number one at 44%, up ten percentage points from just six months ago. Reducing tax and regulatory burdens and reigning in the costs of health care followed a close second and third.
While the report provides a much needed psychological boost to all of us that the worst of our most recent economic challenges may be behind us, this current optimism remains cautious. “Although this report is by far the most positive we’ve seen in quite some time, it is imperative policymakers not mistake these gains for a task completed,” said NSBA Chair Chris Holman, who is the CEO of Michigan Business Network.com and President of The Greater Lansing Business Monthly. “There are countless issues that continue to hinder small businesses.”
To access the full report and its findings, you can click here on NSBA 2011 Year-End Economic Report now.