While small-business optimism about the economic recovery is on the rise, owners are waiting for more proof that the recovery is real and sustainable before investing heavily in growth initiatives, a new survey shows. For now, their top priorities are maintaining their current business and sources of revenue (31 percent) followed closely by growing their business (29 percent, down from 37 percent last spring).
More than half of small-business owners (56 percent, up from 48 percent last fall) have a positive outlook on business prospects and plan to support that optimism by hiring full- or part-time employees (35 percent, up from 31 percent in the fall), according to a new American Express OPEN survey. Equally important, far fewer said they will freeze hiring or cut back (44 percent, down from 61 percent in the fall).
The anonymous survey conducted by phone is based on a nationally representative sample of 813 small business owners/managers of companies with fewer than 100 employees.
Based on how their businesses are performing, more than one-third (35 percent) of small-business owners believe the economy is recovering, but they are proceeding with caution and managing their resources more closely by tempering plans for growth, hiring modestly and getting more out of their employees, the survey found. The payoff is apparent: Two-thirds (67 percent) say work force productivity has improved and fewer are concerned about having cash available to pay bills (50 percent versus 59 percent last spring).
While growth is currently a back-burner issue, when asked what would most help them grow their businesses, nearly half (46 percent) said increased customer demand. Other growth generators on the small-business wish list include tax cuts (20 percent), access to capital (13 percent) and the ability to hire more staff (7 percent). A third of owners surveyed said that tax relief is the most pressing issue the president and Congress need to address.