Editor’s note: 2016 is said to be a challenging year for small businesses – not only in the U.S. but also in the rest of the world. According to the latest NFIB report for December 2015, The Index of Small Business Optimism is slightly increasing to 95.2 – just 0.4 points rose in December 2015. The Index remains flat below average (1986 as the peg at 100), and have yet to recover from the 2009 slump.
The Index characterizes the overall performance of the small business sector in the United States, and the recent survey from SurePayroll shows the same trend. A successful year can still be achieved, but brace yourself – it’ll be a rather bumpy ride.
Here’s the SurePayroll infographic (via SurePayroll blog):
When you look at the trend line over the last 13 months on optimism among small business owners, it doesn’t tell a very good story. Optimism about the economy has been trending down, sliding to 68% in January – off from 78% a year ago and a high of 84% in May.
A typically glass half full group, small business owners are clearly experiencing some uncertainty about the economy. Maybe it’s volatility in the stock market, a slowdown in demand for new products and services, or the weather.
Any way you slice it, a 10% drop year-over-year, as the SurePayroll Small Business Scorecard shows, is something to keep an eye on.
But Here’s the Good News
Despite the slumping optimism number, what small businesses are saying about the actual numbers of their sales is much more solid.
- Most small businesses (52%) have extra cash on hand to pursue new opportunities or deal with unexpected problems.
- 38% said they don’t have extra cash, but they’re not in debt either
- Only 10% said they are operating with a debt
- Only 11% said they need to cut costs and/or reduce staff.
And while the stock market has had a very difficult opening month, 63% said they are not concerned about it impacting business throughout the rest of the year.
Small business owners and entrepreneurs tend to focus on what they can control – that means optimizing the efficiency of their businesses to increase profit margins, proving a better service to customers and finding the right employees.
The Plan for the Rest of 2016
Last year, we saw small business owners’ optimism surge into the spring months. It will be interesting to watch if a similar pattern takes hold in 2016.
For each individual business owner, they tell us the focus will be on the following things:
- Retaining 95% of their customer base
- Getting more involved in their communities
- Better visibility online
- Educating employees
- Finding time to take away from the business and lessening workload
If they stay focused on their specific goals, hopefully they will wind up having another successful year.