If you ask a lot of small business owners, theyâre worried right now.
Whether it is higher costs for health insurance, higher taxes or the inability to hire more workers to meet demand, many small businesses are going through rough times. If that doesnât already paint a dreary picture, a recent survey from the National Federation of Independent Business (NFIB) wonât help matters.
According to the recent survey, small business confidence dropped for a sixth straight month in August, as the NFIBâs Small Business Optimism Index dropped to 88.1, the lowest level going back to March 2010. Data shows that the index has steadily declined since February, when it hit a high of 94.5.
Noting that these results are the first to be unveiled since the debate in Washington regarding the debt ceiling, small businesses are not exactly brimming with confidence over the deal struck by lawmakers.
According to NFIB Chief Economist Bill Dunkelberg in a statement, âThe tumultuous debate over the nationâs debt ceiling and a dramatic 11th hour ârescueâ by lawmakers did nothing to improve the outlook of job-makers. In fact, hope for improvement in the economy faded even further throughout the month, proving that short-term fixes will not help.â
Numbers Paint a Grim Picture
As the U.S. Small Business Administration points out, companies with less than 50 employees accounted for 65 percent of all positions created during the last 17 years. Up a point from July, 12 percent of small business owners believe they will decrease their payrolls over the next three months, while just 11 percent say they are likely to increase employment over the same time frame.
Data mined from the recent survey of nearly 1,000 small businesses indicates that the drop in small business confidence in the last month was highly focused on decreased expectations for real sales gains and business factors. Small business owners tabbed sales figures as their biggest concern.
According to the survey, small business owners were also less optimistic regarding business conditions down the road, with the net percentage of owners believing they would see improved conditions down 36 points since a January 2011 survey.
In order to stimulate hiring, President Obama went to Congress with a $447 billion job growth package, including granting businesses a 3.1-point decrease on taxes they must pay on the first $5 million of their payroll. The plan was presented to Congress as the national unemployment rates holds at 9.1 percent.
Should You Hire Now or Hold the Line?
As a small business owner, have you been toiling with the idea of hiring employees heading into the final quarter of 2011?
In the event you are considering hiring, take several factors into consideration:
- Can the current workload be handled by present staff or do you need extra bodies in the office?
- What will the implications be financially if you bring on extra people in terms of added health care costs, workersâ compensation etc.?
- If considering laying off some workers to bring your finances better into line, would you consider rehiring these individuals down the road when times are better?
- What are your long-term goals for your company?
Being a small business owner comes with a myriad of responsibilities, not least of which is deciding when is the right time to add and subtract employees.
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Dave Thomas writes extensively for B2b lead generation online resource Resource Nation that provides expert advice on purchasing and outsourcing decisions for small business owners and entrepreneurs. He is an expert writer on items like business cash advance and is based in San Diego, California.