Small Business Confidence Showing an 8 Year High
Small business owners reported feeling more confident in November by a margin that surpassed economist predictions, with the NFIB’s index reading 98.1 after a two point gain. In a Fortune.com article on the increase, it was reported that this level of confidence hasn’t been reached on the index since 2007, a positive sign that indicates small business owners believe in the potential for continued economic recovery. Despite this encouraging news, the indicators that brought about this spike in confidence were all soft indicators, while hiring and spending didn’t budge, which indicates that while business owners are prepared to believe in a stronger economy, they have been conditioned by the capriciousness of temporary gains and costly regulations to look before they leap in terms of spending on expansion.
Holiday sales important to small businesses looking to end the year on a high note. The success of Small Business Saturday this year is a promising sign that may have prompted an increase in feelings of confidence, as Black Friday numbers underwhelmed but small business sales seemed to have enjoyed broad consumer support. It remains to be seen if small business confidence will be buoyed by end of the year numbers, or if potential costs incurred by impending healthcare deadlines, economic downturns should Congressional partisanship lead to another government shutdown, or a rebound in gas prices lead to lowered confidence and dashed plans to create new jobs.
Small business owners should manage expenses in order to create room for growth in the new year. Business owners are working towards realizing plans for expansion that they have been waiting or positive economic trends to put into action. By balancing budgets at the end of the year, business owners should plan to free up cash flow that isn’t producing and prepare to make strategic moves that can strengthen their businesses going forwards.
Photo Credit to Horia Varlan on Flickr