Small Business Confidence Dips in June
The NFIB’s Small Business Optimism Index, a widely referenced barometer of economic recovery and health of the small business sector experienced a dip in six of the ten indicators included in the index, as reported by the Chicago Tribune. The indicators that did improve were both related to job creation, with an increase in both new jobs and open positions. Earlier this year, hiring was reported as slow within the small business sector, mostly due to cash flow concerns and fear of economic uncertainty. It is the same fear of unstable economic development that has business owner confidence down currently, however, the addition of jobs to the economy that is paired with this decrease serves as a reminder that business owners are still reporting their confidence as much higher than recession levels.
A cautious approach to expansion is paired with optimism. Businesses want to grow, but at the same time are wary of overextending their resources with the memory of events including the Government Shutdown that took place last year which rocked businesses relying on SBA funding and Government contracts. Even businesses that are reporting an optimistic stance on the future are aware of the need for clear indicators of market stability and demand for their products before they can take on more overhead.
Identifying unnecessary costs can help make hiring more feasible. Business owners who are trying to expand production ability through hiring should also attempt to identify unnecessary costs involved in their operations in order to bolster their cash flows, creating some more cushion with which to support the costs involved with hiring. Revisiting a business plan in order to update it to fit with current market conditions can help businesses more strategically pare down expenses through removing products or services that are not creating enough revenues and highlighting best sellers.
Photo Credit to Paul N on Flickr