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Small Business Optimism Higher Than a Year Ago

When owners are feeling good about their businesses, they tend to act in the form of hiring and investment.

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Halfway through 2013, the small business economy resembles last year at this time. Employee hiring and the average paycheck remain down slightly; both are at -0.1 percent in June.

That said, small business owners are growing more optimistic--more optimistic than they were in June 2012. Despite tremendous uncertainty about the economy, owners report their business outlook has improved, getting to 73 percent last month, compared to 60 percent in June last year. In addition, as many as 76 percent of small business owners said the second quarter met or exceeded expectations, and half expect the third quarter to be even better than the second.

An Unlikely Sentiment Scenario

Owners feel positive about the performance of their businesses, despite uncertainty surrounding the health of the economy overall, and health care reform specifically. Still, those same uncertainties are currently getting in the way of new-employee hiring and increased paychecks. In the SurePayrolll Small Business Scorecard survey, 57 percent of owners said they want to see improved growth nationwide before they'll be confident enough to hire more. One third of the small businesses surveyed are concerned about the implications of health care reform.

When Small Business Owners Are Optimistic, They Tend to Act

Owner optimism tends to spur hiring and expanding. When you consider that optimism at the end of 2012 was only 55 percent, you can certainly see promise in a nearly 20 percent jump. Indeed, more than half of surveyed owners also plan to make new investments in their businesses, primarily in the technology, marketing, and hiring.

If small businesses do begin hiring as the year continues, more Americans will get jobs and have money to spend on Main Street. This is how the wheel that is the economy really begins to spin.

IMAGE: 13thstreetstudio/typepad
Last updated: Jul 11, 2013

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.
@michaelalter




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