Key Findings

SMALL BUSINESS OPERATIONS:
Companies’ financial health is strong

Almost two-thirds

of small businesses report being
in good financial health (61%)

Almost two-thirds (61%) of small businesses report being in good financial health; more than half of small businesses with more than 20 employees are in very good health. A majority of small business owners (56%) believe next year’s revenues will increase. However, 58% of small businesses will only invest about the same as they did last year. A majority of businesses are basically comfortable with their cash flow situation (81%) and are maintaining staff levels. Small businesses in the South and West report being in better financial health than those in the Midwest and Northeast.

Our business has increased. Our clients have increased. Our prospects have definitely increased.

SMALL BUSINESS PRESIDENT
Professional Services Industry,
Oregon

There’s been a tremendous increase in the amount of work we have on the books.

SMALL BUSINESS PRESIDENT
Professional Services Industry,
New York

Our business volume has been strong the first 6 months of the year.

SMALL BUSINESS CEO
Professional Services Industry,
Ohio

SMALL BUSINESS ENVIRONMENT:
Economic outlook is brightening

Small businesses rating
the health of the U.S. economy
as very or somewhat good

Small business owners are feeling the positive impact of a strengthened economy, which includes a rising stock market, higher rates of economic growth, and declining unemployment. They are more optimistic about the national economy in the third quarter (41%) compared to last quarter (33%). Nearly half of small business owners (46%) say their local economy was good. The manufacturing and agriculture sectors are the most optimistic, while firms with more than 20 employees have a brighter outlook than smaller firms.

In my area I see more job opportunity, lower unemployment, an increase in wages, and more businesses opening. Real estate has increased in value. And the demographics in the area have higher income levels.

SMALL BUSINESS OWNER
Retail Trade Industry,
Massachusetts

I am optimistic because of the current economic trends and the lower national unemployment rate.

SMALL BUSINESS OWNER
Arts, Entertainment & Recreation Industry,
Colorado

The overall economy has gotten its engine going again and is moving forward.

SMALL BUSINESS PRESIDENT
Scientific & Technical Services Industry,
Oregon

SMALL BUSINESS ENVIRONMENT:
Time spent on regulatory compliance is
increasing for a quarter of small businesses

Percentage of small businesses
spending an increased amount
of time completing licensing,
compliance or government
requirements

Nearly one in four small businesses report spending more time on licensing, compliance, and regulations over the last six months. This is despite regulatory actions falling to a 17-year low, according to the White House Office of Management and Budget.

Small businesses do not have the dedicated resources to monitor and plan for unclear and changing regulations. If [the rules] were smarter and simplified, then I could focus on growing my business and employing more people with increased wages and benefits.

KIM GILLIAM
Co-Owner, Frolick Dogs LLC
Alexandria, Virginia

We are a third-generation business, and we would like to continue to keep it in the family as long as we can, but that is proving more and more difficult. New regulations on the brick industry have hit us hard.

DAVIS HENRY
Owner, Henry Brick
Selma, Alabama

SMALL BUSINESS EXPECTATIONS:
Staffing increases have stalled

Percentage of small businesses
planning to increase hiring in
the next year

Small businesses may be reaching the limits of their payroll expansion for the near future. In the last 12 months, nearly 1 in 5 small business owners (18%) report having increased staff. Fewer businesses plan to increase staff over the next 12 months compared to Q2. Many small businesses report that they have a hard time finding qualified workers to fill positions (see In the Spotlight here). Businesses in the West expect to add more staff than those in the rest of the country.

There is a skilled labor shortage across the country, so we are always trying to find new talent. We are looking for the best of the best to be part of our team.

RYAN SULLIVAN
President, Xenith
Detroit, Michigan

The biggest challenge in growing my business is finding highly trained, highly skilled workers. I’d like to see our leaders in Washington help us build a more educated workforce.

LUCI MILLER
President and Owner
Miller Imaging and Digital Solutions,
Austin, Texas

Our biggest challenge in this industry—and around the country—is staffing, finding skilled trades. I don’t see young plumbers anymore. I don’t see young electricians. We look for them. It is becoming a little bit of an epidemic.

JOE CIPRIANO
Founder and President
Constructeam
Michigan