Figuring out where small businesses stand in this economy is a bit like piecing together a puzzle in total darkness. You can do it, but it sure does take a while.
After months of research and combing through conflicting reports, I think I’m about as close to understanding where the majority of small businesses are as I’ve ever been. That should continue until a week from now, when the next poll reveals I’m completely wrong. Regardless, let’s wade in.
Via Small Business Trends, we have a report that indicates that small businesses have managed to hack their way out of a jungle of financial troubles. Because it took so long, however, the majority of small businesses are still reluctant to spend, whether that means hiring more, pursuing loans or just ponying up money to use on their businesses.
SBT has more:
But while their finances are improving, U.S. small businesses are still keeping a tight hold on the purse strings. Fewer than one-third (29 percent) expect to add employees over the next six months, which is similar to previous results over the past year.
And slightly less than one-fourth (23 percent) say they plan to increase spending on business development or investments in the next six months. Most (67 percent) will keep spending at current levels.
We talk a lot about how the economy could grow, and the conclusion I keep coming back to is at least partly driven by small businesses. When they indicate they’re not willing to spend, that is inevitably going to lead to some slowdown in the recovery.
How to fix that? Well, each small business has to figure that out on their own, as you’re undoubtedly aware. But I believe there needs to more dialogue between lenders of all stripes and the small businesses they lend to, and where the financing is readily available (shameless plug alert: Like at Direct Capital!) it needs to be communicated to the businesses that it is available. When you, the small business owner or employee, have enough confidence to start spending, a lot of pieces will fall into place.
What’s your reaction to this news?
Photo credit to yochim at http://www.sxc.hu/photo/851428
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