Fewer small business owners have plans to increase their staff this fall. According to the Business Confidence Survey by Insperity, Inc., only 26 percent of small and medium sized business owners said they are adding more employees, which is down from 40 percent in July and 28 percent in October 2012. However, only 5 percent said they are laying off staff, which is down from 9 percent compared to the same time last year.
The survey revealed growing pessimism about future performance. While 26 percent said they expect an economic rebound during first quarter 2014 or later, 48 percent said they are unsure when it will occur. That number is up from 38 percent during last quarter’s survey, indicating a growing sense of unease about the economy. According to Paul J. Sarvadi, Insperity chairman and CEO, this is causing owners to change their strategies.
“Survey responses indicate that business owners are returning to more cautious management strategies to safely execute their short-term and long-term business plans,” said Paul J. Sarvadi, Insperity chairman and chief executive officer. “Regardless of industry, businesses continue to balance the current challenging risk-reward ratio in creative ways to serve clients and grow profits.”
According to respondents, business is risky in the short term due to the economy and government health care reform, with 67 percent and 55 percent citing these as challenges, respectively. In the long run, the federal deficit and national debt topped the chart, with 64 percent indicating concern.
Small businesses resilient
Although challenges are widely prevalent, overall business performance has not taken a serious hit. According to the survey, 68 percent of owners said they are either meeting or exceeding their yearly performance plans, which is down only 4 percentage points from last quarter. These results suggest that many businesses are finding ways to cope with the issues they face.
To increase profit, 68 percent of respondents said they will be seeking new accounts, while 62 percent would like to increase service to existing clients. Forty-six percent seek to add new products or services, while 28 percent plan to invest in new improvements to their businesses.
To successfully perform any of these profit-generating activities, small businesses might be in need of financing. Getting a small business loan can help owners make improvements, roll out new products, increase staff to find new clients and many other initiatives. While bank lending is time-consuming and unreliable, an alternative lender has simple paperwork and speedy processing times. National Funding can help businesses start reinvesting in as little as 24 hours.