Anxiety has run high for small-business owners across the country. If you’ve been feeling your business has been on a roller coaster ride over the past few months, you’re not alone – small business sentiment has been all over the place.
If you’ve been following small-business news, you’ll know there’ve been conflicting reports; should your outlook be grim or rosy?
To be sure, small businesses have plenty of reasons to feel optimistic – and cause to pause and reflect.
Let’s take a closer look at what’s going on in the world of small business.
A Fresh Perspective on Main Street
Main Street looks much different today. We live in a multi-screen world with constant connectivity – and this has drastically changed the way we shop.
We can browse online, peruse Main Street shops or visit the local mall. It’s all shopping. We look for the right product at the right price, and where we get it doesn’t matter as much if we trust who we’re buying it from.
More and more, small businesses are adapting. They realize they must reach customers where customers are if they’re going to remain relevant.
Small businesses are getting smart about e-commerce. It’s no longer reasonable to expect to thrive with a brick-and-mortar presence alone.
In fact, small firms have come to realize that Amazon isn’t so bad after all.
More than two-thirds (68%) of small-business owners who sell online say Amazon has positively impacted their sales.
Plus, 43% of small businesses selling online say they have experienced significant revenue growth, while 38% experienced a moderate revenue increase.
Take Fulfillment by Amazon, for example. This program lets small businesses offer Prime two-day shipping by pre-shipping their items to Amazon fulfillment centers and letting the company handle packaging, shipping and customer service.
Amazon, and other ecommerce marketplaces, have allowed Main Street businesses to operate without boundaries.
Instead of viewing Amazon as a corporate colossus steamrolling over mom-and-pop shops, many small businesses are seeing an opportunity to evolve and differentiate.
While many headlines would lead you to believe retail is dead, it couldn’t be further than the truth.
This includes shifting focus on redesigning the environment to offering workshops, and different services that complement the businesses core offering.
The trick is finding the right balance between, “things to look at,” “things to do,” and “things to buy.”
Small Business Hiring is Slowing
The Small Business Jobs Index decreased 0.12% from last month and 1.07% from last year, according to Paychex, a payroll, human resource and benefits provider.
A rise in small-business automation is also allowing small-business owners to get by with fewer employees.
When you’re pressed for time, the best way to overcome the limitation is automating some of your processes, whether it’s capturing leads or streamlining routine office tasks.
Still, there are times when you need to fill open spots to take your business to the next level. Are you trying to find workers for your business? Don’t let limited budgets and small size be a barrier to your success.
There are many ways to attract and retain the best workers, from employee benefit programs to unique perks such as making your business dog-friendly.
High-quality employees are out there—you just have to know how to attract them to your business.
Small Business Wages are Growing
Offering higher wages is one way to get potential employees in your door.
In March, 33 percent of small firms raised compensation, according to the National Federation of Independent Business, the largest small-business association in the United States. This is the largest share since November 2017.
So, why the pay boost?
Small businesses are feeling confident. They’re excited about expanding their business, and they want to make sure they hire the best talent.
And now happens to be a great time to expand. Nearly a third of Main Street businesses say they are enthusiastic about growing in the year ahead.
Small-business owners might have some extra profits to sweeten pay packages thanks to more online sales and tax breaks.
One of the most buzzed-about new write-offs this year was a deduction based on your share of qualified business income (QBI).
To get a better understanding of QBI, check out this Forbes article, which includes case studies with insight for different business situations.
With more cash in their pockets, whether through online sales or tax breaks, small-business owners are feeling good about boosting wages, bringing on quality employees and growing their firms.
A Slight Slump in Sentiment
Despite more funds at their disposal, small-business owners aren’t feeling particularly optimistic. In fact, sentiment took a tumble in March, dropping to a five-month low.
The National Federation of Independent Business reports a March level of 104.7, while in February, sentiment skyrocketed to 107.6, the second-highest level in the survey’s 45-year history.
One of the reasons is undoubtedly the trade dispute in China.
Main Street businesses are grappling with the uncertainty of what’s going to happen between the United States and China. Many business owners are hesitant to expand considering the current climate.
They’re wary about the idea of new sanctions, which would mean higher costs for all. No matter your industry, things will likely become more expensive. And the bigger the business, the more it will feel the impact of the tariffs.
It’s entirely possible, though, that the U.S.-China trade dispute will fizzle out, as neither country has enacted their sanctions.
When the world’s two largest economies are in the middle of a high-stakes trade confrontation, it’s nothing to scoff at. But it also hasn’t caused Main Street to lose its mojo.
Recent sentiment took a dip due to the trade tussle, but small-business optimism still reached 16 consecutive months of historically high readings.
Main Street businesses are keeping a watchful eye as the confrontation unfolds, but it’s certainly not their primary focus.
They’re as committed as ever to investing in their business, whether it’s by ramping up their online presence or bringing in new talent. And when they invest in their businesses, the economy ultimately grows.
Small-business owners are getting smarter. They know how to compete from the standpoint of their physical shop and their digital presence, and they’re not going to be overshadowed by larger retailers.
They’re also hopeful about boosting wages, onboarding high-quality employees and growing their businesses. Small-business sentiment might take a dip every now and then, but it doesn’t reflect the overall state of small business.
Instead, the high and lows just come with the territory. The ride can be bumpy sometimes, but it’s absolutely worth it.
When you make the leap into running your own shop, you’re in control of your destiny. Whatever stage your business is in or whatever is on your mind, we’re here to join you on your journey.