A Look at the Meaning Behind Rising Small Business Optimism
With the NFIB reporting small business optimism levels at their highest since September 2007, the news that businesses are becoming more confident seems like it is worthy of serious celebration. However, there is a large disconnect between the reality on the ground for many business owners and the positive gains in optimism that have been reported. According to the report, while “soft indicators” of optimism went up which include expectations of future performance, there were no significant gains in hiring and other indicators that traditionally signal the small business sector’s contribution to a growing and improving economy.
Until small business owners are able to put their confidence into action, the recovery will continue to move at a slow clip. Business owners are reticent to hire, which would mean taking on more costs for their businesses without a guarantee that they will be able to recoup their costs. In addition, recent regulations have many business owners worried that they will not even be able to sustain the costs of operating at their current levels. While traditional banking is slowly waking up to the need for reliable sources of capital for small business owners that they left behind in the credit crunch, there are still a substantial number of business owners who cannot meet their risk adverse criteria, turning to alternative capital or other funding options in order to grow.
Confidence levels should be protected during the Summer locally through small business recognition. Business owners can do their part to support each other and play on their increased confidence through community outreach. Shop local campaigns have become common in many areas of the US, often with joint participation from business owners and local chambers of commerce. By promoting the diversity of local businesses and rallying the community around the positive message of supporting them, businesses can use their major strengths to gain and preserve market share and make their confident predictions into reality.
Photo Credit to Bailey Weaver on Flickr