Great News for Entrepreneurs: Small Business Optimism is on the Rise!
Small business owners have been in the dumps since 2008 when the economy crashed. That fateful decline resulted in small business owners dealing with fewer profits, less employees, no chances of getting a loan, and decreased hope for the future of their business. In fact, a large majority of small businesses had to close their doors during the Great Recession.
But things are finally turning around.
The Latest Small Business Optimism Data
The Small Business Optimism Index, just out last month, shows that small business owner optimism is at the second highest level in history. It rose by three points to 107.8, and business owners attribute it to tax cuts and regulatory changes. That’s encouraging for those already in business, or for those who want to start a business now.
And all of this optimism has resulted in some pretty serious benefits to the economy. Here are some of the statistics from the study:
· Employee compensation is at net 35 percent, which is a 45-year high.
· Positive earnings trends are also at a high at net 3 percent.
· Positive sales trends reached their highest level since 1995.
· Nineteen percent of business owners say they are planning a price increase, which will of course lead to even higher profits. That’s the highest level since the decline started in 2008.
· A net 3 percent of those surveyed are experiencing higher profit trends.
· Small business owners are hiring more employees and paying them more. And while they are still having a difficult time finding qualified employees, they now have more financial resources to seek them out.
· Twenty-nine perfect of business owners are actively trying to hire skilled workers, while 12 percent of them are looking for unskilled workers.
· Thirty-five percent of business owners are increasing labor compensation.
· A lack of credit has been a huge deterrent since 2018, but this latest study shows that 37 percent of them say their credit needs have been met, but 43 percent say that they have no need for a loan. That's the lowest number since 2007.
What Does All of This Mean?
If you’re planning on starting a business, it’s never been a better time. Sales are up, profits are higher, optimism is through the roof, and wages are up.
But please, if you plan to start a small business, make sure you’re well-prepared and have first done all of the necessary research and planning. After all, one out of every two new businesses fail, and you should do all you can to ensure that your new business is a success.