The fledgling economy can knock us down, but small business isn’t having it. Small business optimism leapt 20 percentage points in October, according to the SurePayroll Small Business Scorecard, which measures payroll data of 35,000 small businesses across the country. This, despite the fact that nationally—for over a year now—small business hiring has been flat or down.

The SurePayroll Small Business Scorecard has told the story repeatedly now for 13 months.  With year-to-date hiring down 2.9 percent and wages down nearly 1 percent, small business optimism is a glimmer of sun through an otherwise dreary scene.  Hiring continues to decline, but the decline is slowing and if optimism holds, it could turn positive. In addition, wages have declined since a February peak, but are slightly up over this time last year. 

Still, 53% of small business owners report feeling “positive” in October.  There are two ways to look at this.  At first glance, you could assume that optimism is following the stock market which made a steady climb in October.  But I think the story goes a bit deeper.  I think it is more about the typical temperament of successful small business owner.  Typically –entrepreneurs don’t let the so-called “state of the union” hold them down.  When things get tough, they knuckle down and find a way to turn the negatives in their favor. They’re in it for the long haul and they know that the long haul sometimes requires faith and a fight.

That long-haul perspective is crystal clear in our October survey of small business owners.  In the survey, we asked small business owners: ”Of all the various economic challenges the president and presidential candidates are debating (the budget, deficit, housing crisis, health care, tax rates, access to capital, entitlements, and more), what are the things you would want the president or future president to focus on to positively impact hiring?  Their answers are telling.  Number one and two respectively were balance the budget and reduce the deficit.  The basics of running a successful business, right?

On the surface, it looks like your first lesson from Business Basics 101.  But these answers say much more.  Asking the President to focus on these things could actually hurt a small business owner in the short term.  These answers prove small business owners today are thinking long term!  They are willing to hurt a little today to ensure a stronger and more successful future.  Smart…that’s why our nation was built on small business.

And innovation, another critical building block to small business success, also came up in the survey results.  Innovators look at the obvious and create the ingenious.  When asked whether some form of a simple flat tax would impact hiring, nearly 50% of small business owners feel that a flat tax would have a positive impact on hiring and only 1 in 10 thought a flat tax would negatively impact hiring.  The message to legislators: A flat tax may just be an idea worth more aggressive exploration.

So as optimism makes a small business comeback, we hope that we will see the tide on hiring and wages turn with it.  And as we watch those economic indicators, there are a few things I recommend small business owners focus on:

• Caution is your friend, but use it wisely. Take the time now to plan your strategy so when the time is right you are ready to act.

• You control your success!  Don’t allow market forces to freeze your potential. You can adapt your business to be successful or you can fall victim to the economy and let it hold you back.  It’s your call.

• Innovate, innovate, innovate.  Historically, more innovation happens in difficult economic times.  When times are tough, better service wins, so look for ways to turn challenges into opportunities for your business.