Not only is it National Small Business Week (April 30 – May 6), but it’s also a great time to be a small business owner. Recent reports have shown optimism has surged among small business owners since the November 2016 presidential election, so much that one prominent industry association says confidence is higher than any time since the early years of the 21st Century.
According to the December 2016 Small Business Economic Trends quarterly index, published by the National Federation of Independent Business (NFIB), small business optimism jumped to 105.3, up 7.1 points from 98.4, following the recent presidential election. That figure represented the index’s biggest monthly increase since 1980 and its highest overall level since 2002.
That optimism hasn’t dimmed, with the latest quarterly index for March 2017 holding at a robust 104.7, down only 0.6.
“Small business owners remain optimistic about the future of the economy and the direction of consumer confidence,” NFIB President and CEO Juanita Duggan said in a statement on the organization’s website. “We are encouraged by signs that optimism is translating into economic activity, such as capital investment and job creation.”
Among the good signs for the economy are small business’s improved earnings and plans to increase capital expenditures, the NFIB said. The March earnings index jumped four points since last measured in February, while the capital expenditures component rose by three points. Small business owners also reported plans to hire more workers, bumping that index segment up one point.
However, despite the overall optimism, there could be a few trouble spots on the near-term horizon, noted NFIB’s Chief Economist Bill Dunkelberg. “The Uncertainty Index hit 93 in March, which is the second highest reading in the survey’s history,” he said in a statement. “More small business owners are having a difficult time anticipating the factors that affect their businesses, especially government policy.”
In addition, the expansion plans component was unchanged over the previous month, indicating at least a little hesitation, despite the generally high optimism elsewhere.
Such uncertainty may be natural any time the White House changes hands and a new administration settles in.
“The April data (due out in May) will tell us much more about how small business owners are processing the events in Washington,” Duggan added. Among the key areas small business owners will be watching, she said, are repeal of Obamacare and tax policy.
Over the last 25 years, the U.S. government has primarily focused on large-scale trade agreements (NAFTA, the Trans-Pacific Partnership, etc.), which small business owners didn’t always believe directly benefitted them. These agreements, they felt, more often favored big businesses with a large overseas presence. The recent renewed emphasis on domestic markets could give a greater boost to smaller businesses and local economies, they reason.
A small business is most frequently defined as a company employing 500 or fewer workers. According to that definition and the U.S. Small Business Administration (SBA), 99.7 percent of all businesses in America are small businesses. More than half of all working Americans either own or work for a small business. Furthermore, small businesses create about two out of every three jobs in the U.S. each year.
The SBA created Small Business Week in 1963 to annually recognize and celebrate the tremendous contributions small businesses make to the domestic economy.
Several large and famous companies started life as small business, some so small they were first housed in a garage! Among the best known are Ben & Jerry’s (ice cream), Whole Foods (grocery), Disney (entertainment), Mattel (toys), Google (internet), Amazon (retail), Wal-Mart (retail), Harley Davidson (motorcycles), Apple (computers) and Nike (apparel).
Thank you to all small business owners for your contributions and to those now large businesses that started out small and now give us reason to dream big.