While the economy continues to stabilize and small business owners are increasingly optimistic about their entrepreneurial prospects, a recent study suggests owners are playing safe now more than ever.
Fewer identify themselves as risky
According to The Hartford 2013 Small Business Pulse report, 80 percent of small business owners who took part in the survey view themselves as conservative in regards to risk-taking. During a fall 2012 poll that number stood at 73 percent, while in the spring it was 49 percent.
Overall, just 2 percent of small business owners classified themselves as risk tolerant, down from 17 percent who said the same last year.
Despite the general cooling of risk-taking ambition in the small business world, most respondents felt successful in their endeavors (73 percent). When asked to compare the recovery of their local economy to the national market, 44 percent were more optimistic about the former, compared to 23 percent who viewed the latter through a rosier perspective.
Risks still present
Most small business owners have expressed optimism, yet many pointed to the persistent presence of a number of risks as cause for concern. They might need a small business cash advance to tackle this issue. Fifty-two percent cited sluggish economic growth, 44 identified health care costs and 40 percent said taxes. Forty-nine percent said federal spending cutbacks had an impact on their business, 76 percent said it was a negative effect.
“As a major risk, slow economic growth and health care costs continually affect how we operate as a business and plan long-term growth,” said Dominic Liuzzi, owner of Liuzzi Gourmet Food Market in North Haven, Conn. “Like many other small business owners, I have been taking a wait-and-see approach this year, rather than making quick decisions about expanding distribution, hiring, or purchasing new equipment. This gives us the time to get a better read on economic conditions, and evaluate what is working well with my business and determine how we better differentiate ourselves from the big stock stores.”
Owners were also less bullish on hiring: 47 percent said they cannot afford to expand payroll. Perhaps a factor behind this was the 39 percent who reported their business was not growing.
Regardless if owners have a risky or conservative mindset, many entrepreneurs need help securing financing. In this case, small business owners can turn to National Funding for a small business loan that will help them cover cash flow and other expenses.