Ask any small business owner how business is and even those who honestly report, “It’s great!” will also likely say, “But we can always use more.”
Knowing this about the heroes of Main Street, to find out what’s really going on you have to ask the way we did recently in our online poll: “What’s the greatest challenge for your business right now?” Below are five options we provided, the responses, and my thoughts.
It was surprising to learn that less than 10% reported “Finding qualified people” was their big concern, which was down from past surveys. Some sources estimate there may be 4 million positions going wanting for qualified candidates, so my speculation is that this change has more to do with the economy than talent supply.
And it was interesting that less than 10% of our sample were troubled by Obamacare impacting their HR strategy, also down from past polls. Perhaps the fear factor has diminished since the president delayed the employer mandate to 2015. We’ll see if this response changes next year.
According to Dr. Bill Dunkleberg, Chief Economist for the NFIB, who’s polled small business owners for 40 years, their single greatest concern over this period has been taxes and regulations. But when we offered this option in our poll, only one-fourth of our folks chose it. Since taxes and regulations have actually increased in the past five years, the next response represents what it took to knock these perennial pains off the top.
The big number in our poll came in at 58% for, “We need more sales.” This response has to be juxtaposed over another response we’ve received for the past five years, which is that consistently three-quarters of small businesses feel they’re operating in a stagnant economy. At this stage of a recovery, the economy should be growing at 4%. But when you see this response from the sector that creates over half of U.S. GDP, it’s not difficult to understand why the economy has barely averaged 2% growth per year.
Response to the next option supports the previous one. Only 3% said, “We need a bank loan.” For five years small businesses that survived the Great Recession did so by de-leveraging and learning how to operate more efficiently. Bank loans are the primary source of small business growth capital, but when the economy isn’t growing so goes business loans.
Wall Street, once the leading indicator of the economy is now merely a leading indicator of itself. The new leading economic indicator is Main Street. If you want the economy to grow, create conditions that foster small business growth
If the economy is the chicken, small business is the egg.