Small Business Owners Regaining Confidence Slowly But Steadily
Small business growth may have been nothing to write home about for the month of February, but at least the numbers are in positive territory. That's according to the Intuit Small Business Employment Index, which places last month's small business growth at .3% with roughly 50,000 new jobs created nationwide. But the Index also notes that while employment and hours climbed for the month, wages remained unchanged.
Confidence Clings to Life
“This month’s report is a lot like last month’s,” says Susan Woodward, an economist who worked with Intuit on the Index. Confidence, however, continues to prove the biggest kicker today in small business. Indeed, confidence is alive and well despite ongoing economic turmoil. According to the monthly Discover Small Business Watch, economic confidence among small business owners is remaining steady -- and "steady" in today's challenging small business climate is, without question, an accomplishment.
According to the findings by Discover, 34 percent of small business owners say economic conditions in the country are improving. That figure represents a 3 percent increase over January's confidence level. 41 percent, on the other hand, say conditions are worsening, although that figure remains unchanged from last month. A show of confidence is emerging from out of January's 24 percent undecided stronghold. Now only 20 percent of small business owners are convinced that economic conditions are stagnant or remaining the same.
Problems Persist for Majority of Small Businesses
Matters of confidence aside, struggles remain. And they're apparent in the data. 50 percent of small business owners, for example, reported encountering temporary cash flow issues within the last three months -- issues that caused them to postpone paying bills. That percentage is a full 7 points higher than it was in January. By comparison, a minority of small business owners (46 percent) had no temporary cash flow problems. Based on compiled data, the average monthly percentage of small business owners who encounter cash flow issues in the 90 days preceding the poll is 43 percent over the past 55 months.
Based on the findings in Intuit's report, the average monthly pay during the month of February for all small business employees was $2,612 -- virtually identical to January's revised estimate of $2,614 per month. If consistent for the year, this will place the average small business employee's total wages at about $31,300.
“Compensation and wages for hourly workers are essentially flat as they were last month, and have been for a year,” Woodward says. “This is a sign that the labor market is still soft. Small businesses are hiring, but they do not have to pay up to get people.”
Social Media May Get Boost from Small Business Use
Discover's report indicates that the number of small business owners planning to increase their advertising and marketing marketing budgets in the next six months is 28 percent, down from 30 percent last month. Although the cash available for marketing will be reduced, the need for promotional muscle will remain strong, if not stronger than before. Consequently, many business and marketing analysts believe that social media will play a much larger role in small business marketing by the end of 2011 than it already does today.
Michael Essany is a business writer for Intuit and is passionate about solving small business problems.