Small business owners around the United States are feeling more optimistic than they have in some time, according to the Fall 2015 PNC Economic Outlook Survey. Do you share their sunny outlook? Here's some of what the survey uncovered.
- 25 percent of the small business owners surveyed expect to hire new employees in the next six months. That's the largest number planning to hire since 2012
- 26 percent have hired employees in the last six months—a significant increase over the 18 percent who reported hiring in the spring
- Over 40 percent will raise wages and salaries in the next six months—the highest percentage since 2007, before the Great Recession
- More than 90 percent will at least break even this year, while 70 percent will make a profit. Just 6 percent project taking a loss
What's behind small business owners' optimistic views? Largely, it's due to declining energy prices, as well as lower prices for other essentials. Just half of small business owners in the survey expect their suppliers to raise prices in the coming year, down from 62 percent last year. And only 28 percent plan to raise prices in the coming year, a decrease from 38 percent last year.
No wonder that 87 percent of entrepreneurs surveyed are optimistic about their own businesses prospects for the coming year. That's up from 83 percent this spring. In addition, 76 percent are optimistic about their local economies—the highest number since 2007. Almost 60 percent believe housing prices in their local market will rise in the next six months. Finally 67 percent feel optimistic about the overall U.S. economy. That's not too shabby.
As they plan for a positive year of growth, small business owners aren't planning to take out loans or lines of credit to attain their goals. Just 18 percent plan to pursue loans or credit lines in the next six months. This, even though 23 percent say access to credit has become easier to obtain than it was three months ago, and only 12 percent say gaining access to credit is harder.
While not tapping into outside financing sources, the small business owners plan to reinvest in their own businesses. Thirty-six percent plan to invest in business operations, 29 percent will put money into their cash reserves, 27 percent will distribute money to owners, and 25 percent will pay off debts and liabilities. One rising cost they are worried about is health care: Nearly half (49 percent) expect the cost of employee health insurance to increase in the next six months.
Small business owners do have a few concerns, however. For one thing, although they're interested in hiring, they say it's becoming more difficult to find qualified workers. More than one-third (34 percent) say it’s harder to hire qualified employees than it was a year ago. One in 10 (11 percent) who aren’t currently hiring say it’s because they can’t find skilled workers.
What are your plans for the next six months? No matter what your business goals are, a SCORE mentor can help you achieve them. Visit SCORE to find out more.
Article written by Rieva Lesonsky for SCORE