Survey Says: Business Owners Still Troubled by Economy
Entrepreneurs continue to express doubts about hiring and the overall state of the economy.
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Nearly every business owner I talk to these days seems to be feeling uncertainty -- a theme reflected in this week's surveys. Entrepreneurs are itching to power up their businesses the minute the economy bounces back, but no one knows when that will be. Here's a closer look at some of the latest small-business surveys.
Small Businesses Hiring, Slowly
The good news on small-business hiring continues with the release of Intuit's Small Business Employment Index. In July, businesses with fewer than 20 employees continued to hire, though at a slightly slower pace. These companies created 40,000 new jobs in July -- down from June's revised estimate of 45,000 jobs. And things are starting to look up for employees: Both wages and hours worked increased, by 0.7 and 0.9 percent, respectively.
"It appears that small businesses... need additional help but are asking their existing people to work more hours rather than hiring more people," says Susan Woodward, the economist who helped develop the survey. On the surface, this hesitation to hire makes sense to me -- most entrepreneurs are not confident about the state of the economy. On the other hand, you have to examine whether you're holding back your business by playing the waiting game. Could you do and grow more if you had some additional help?
Entrepreneurs Uncertain About Recovery
Underscoring that lack of confidence I mentioned above, the latest Business Confidence Survey from Administaff shows 61 percent of owners of small and midsize businesses now believe the economy won't rebound until 2011 or later. Around 20 percent expect a turnaround this year, while another 20 percent are "unsure."
Economic concerns are rising: Seventy-eight percent of respondents said the economy was one of their biggest short-term concerns, up from 71 percent in April. While 65 percent said they are either meeting or exceeding their 2010 performance expectations, that was down from 72 percent in April, and 35 percent are doing worse than expected.
Echoing the Intuit survey, while 31 percent of businesses are hiring, 60 percent of businesses are maintaining current staffing levels. Just 9 percent were laying off employees.
Affluents Toss and Turn
Even affluent Americans aren't feeling great about their financial futures. According to the latest Merrill Lynch Affluent Insights Quarterly, more than half (52 percent) of affluent individuals surveyed said financial worries are keeping them up at night. What specifically are they losing sleep over? Forty-two percent fear they can't maintain their family's standard of living; 40 percent worry about family health-care costs; 37 percent are concerned about their rate of savings and retirement investments; and 33 percent are worried over ongoing family expenses.
The fact that more than a few of these affluents are entrepreneurs explains the uncertainty that's also plaguing the business owners in the other surveys. And the recent gyrations of the stock market aren't helping.
At the risk of sounding like Jimmy Carter, we business owners have to snap out of this malaise we're in, or I fear we'll end up in a self-perpetuating cycle of doom and gloom. The economy can't really recover until consumers start spending, and they can't spend if they don't have jobs.