The outlook for the small business economy was muddied by April's showers last month. With hiring down 0.2 percent and the average paycheck flat, according to SurePayroll's Small Business Scorecard, small businesses seem to be feeling the effects of the payroll tax increase and sequester. Both may be hurting, and certainly neither is helping.

The question is whether these are short-term bumps in the road, or evidence the economy is stuck? Based on what I'm seeing, small business owners appear to be looking at these changes as the new normal. While their optimism about the economy has been close to 70 percent the last two months, hiring fell, according to the Scorecard survey of 40,000 small business owners.

Productivity Outpaces Hiring Needs

This suggests to me that small business owners are adjusting expectations for a slow-growth environment, one in which they're able to grow revenue, but not ramp up staff simultaneously. As I've seen in the past, productivity is outpacing the need to hire.

While it's frustrating, it's also a credit to small businesses. You've been able to take advantage of new ways of doing business, using smartphones and cloud technology, to be more efficient. 

Don't Expect Much From Government

It seems clear that the way forward for many small businesses in this economy is with more of your own ingenuity. Outside help is not coming. You've heard Congress argue, gotten gone through Obama's reelection, endured harsh measures in the payroll tax increase and sequester. Nothing has really changed for the better.

If you're not keeping up with the latest technology and the easiest, most cost-efficient ways of doing business, you're going to be left behind. The competition is too fierce, the pace of change too fast.

The promising part is that, if you seize the opportunity, even during April showers you can innovate.

Published on: Apr 30, 2013
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