Profits, Not Growth, Could Rule 2014
Despite a sense of excitement for the new year, half the small-business economy seems stuck in neutral, according to the results for the January 2014 SurePayroll Small Business Scorecard® survey.
Hiring is down 0.1 percent, and the level of optimism is relatively unchanged at 65 percent, compared with 70 percent in December. Worse still, only half of the businesses surveyed said they plan to fill new positions in 2014.
Small-business owners are glass-half-full kind of people, so the state of the small-business economy may seem to fall under a positive light. Forty-five percent said they have cash flow to support an opportunity for growth, while 80 percent expect to be profitable regardless of the economy’s growth rate. Meanwhile, about 60 percent of the businesses said they consider themselves growing companies.
The flip side to all this is that 55 percent of small businesses don’t have extra cash on hand for unforeseen events. And with only half of them expecting to hire, it’s difficult to foresee significant gains in employment, especially among those businesses with only 10 or fewer employees.
However, as many as 2 in 5 businesses plan to expand beyond 10 employees, although it doesn’t appear that will happen in 2014. They’ve learned too much in the past couple of years about how to be productive and profitable without hiring and don't want to make unnecessary changes. They'll hire when conditions are right, or when there is strong demand and qualified candidates.
There is still some promise that the small-business sector could grow faster than expected. And once those new hires come on board, that could mean more innovation and new clients.
Do you plan to fill new positions this year? Let us know which direction you’re taking.
MICHAEL ALTER | Columnist | President of SurePayroll
Michael Alter is president of SurePayroll, America?s leading online payroll service. He received an MBA from the Harvard Business School and holds a bachelor's degree in economics from Northwestern University.