Tags: small business | owners | economy | hiring

Little Faith: Small-Business Owners Don't Trust the Recovery

By    |   Thursday, 21 August 2014 03:41 PM

Not trusting the nation's economic recovery, small-business owners are reluctant to hire.

According to a CNNMoney-Manta survey, 28 percent of small-business owners say their biggest challenge is the economy.

The next biggest worry was growing sales (21 percent), followed by government regulation (18 percent) and financing (15 percent). Only 5 percent cited healthcare as their biggest challenge.

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Victoria Aguilar, founder of The AR Group, tells CNNMoney her law and consulting firm has been doing well. It has six employees and is averaging 10 percent to 20 percent annual revenue growth.

"But is it safe to bring on another employee?" she ponders, saying she's been considering expanding services to include immigration law for more than two years.

"It's a hard decision. There was a point in time where I wouldn't have been so reluctant. We're not entirely certain that the customer base is willing to spend money. People are trying to solve their own problems."

Other business owners, including her clients, feel the same way.

"There's a timidity of opening purse strings," Aguilar tells CNNMoney, explaining that business owners want to be sure they have enough savings to survive if the recovery stalls.

The most recent survey by the National Federation of Independent Businesses shows that optimism among small business owners increased slightly last month but remains near a historic low.

The NFIB's July Optimism Index rose 0.7 points to 95.7. Except for the outlook for expansion and business conditions, there was little change in the 10 index components.

"On the positive side, expectations for business conditions and outlook for expansion accounted for virtually all of the net gain in July’s Index," says NFIB chief economist Bill Dunkelberg.

"However, capital spending reports continue to remain mediocre, spending plans are weak, and inventories are too large, with more owners reporting sales trends deteriorating than improving. As long as these stats continue to hold, the small-business half of the economy will continue to not be able to pull its weight."

Small-business owners increased employment by a seasonally adjusted average of 0.01 workers per firm in July, the tenth consecutive month for hiring gains. Thirteen percent of owners added an average of 2.9 workers per firm over the past few months. On the other hand, 12 percent reduced employment by an average of 2.7 workers.

Editor’s Note: 5 Shocking Reasons the Dow Will Hit 60,000

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Not trusting the recovery, small business owners are reluctant to hire. According to a CNNMoney-Manta survey, 28 percent of small business owners say their biggest challenge is the economy.
small business, owners, economy, hiring
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2014-41-21
Thursday, 21 August 2014 03:41 PM
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