Economic Outlook: Where Are Small Businesses Planning to Spend?Rieva Lesonsky
Where are small businesses planning to spend this year—and how does your small business budget measure up? Apparently, the latest PNC Economic Survey reports, entrepreneurs are feeling better about their futures than they have in quite a while, and as a result, they’re opening their wallets.
More than one-third (37 percent) of business owners are optimistic about their own company’s prospects during the next six months, up significantly from 22 percent last fall. More than half (55 percent) say they expect sales to increase in that time frame, while 41 percent believe their profits will rise. Just 12 percent are pessimistic about their prospects—the lowest number since 2007.
In addition, entrepreneurs are feeling better about the U.S. economy than they have since the Great Recession hit. Nearly 8 in 10 say they’re either moderately or greatly optimistic about the economy as a whole.
All this spells a sunny spring hiring season. Twenty-two percent say they’ll hire in the next six months, up from 16 percent last fall, and 32 percent say they’ll raise wages for their employees. No wonder 70 percent say they wouldn’t be affected by a federal minimum wage increase.
Small business owners seem to be feeling more confident in their cash flow as well. Just 15 percent say they plan to take out a loan or line of credit in the next six months, even though growing numbers say credit is becoming easier to obtain. In addition, about 40 percent say they’ll raise prices in the next six months, which should also help their cash flow.
What do these results mean to your business?
- With hiring on the upswing, now is the time to assess your staffing needs for the remainder of the year and make plans to hire if necessary.
- The improving economy will mean better pickings for employees as previously cautious workers seek greener pastures—but your business will need to compete with many others. Present your business as a great place to work by emphasizing your small, friendly corporate culture and the ability to learn and grow on the job.
- Don’t forget your existing employees—they may be exploring other job options. Take steps to keep your top performers happy and challenged, with adequate rewards—financial or otherwise—to keep them from jumping ship.