U.S. Chamber of Commerce Kicks Off New Small Business Index
The U.S. Chamber of Commerce is giving the world a new way to measure the pulse of the small business world with the debut of its quarterly Small Business Index. The index – a survey of a thousand small business owners for the inaugural edition – is a partnership with Metlife to gauge sentiment, provide guidance and provide a more complete picture of the small business world.
The index itself is a score between 0 to 100 based on small business owners’ confidence (or lack thereof) in their own companies and the broader economic environment. But the Chamber of Commerce also digs in with more specific questions about things such as hiring and government mandates, and even provides some specific perspectives from owners across the country.
Here are a few of the more interesting findings from the inaugural small business index:
Q2 2017 Small Business Index Highlights
60.6: The very first reading of the index is just above 60 on the 0-100 scale, which can best be described as cautiously optimistic. Per the Chamber: “The Q2 Index score of 60.6 (on a scale of 0 to 100) was buoyed by small business owners confidence regarding the health of their companies but tempered by their concerns about the direction of the national and their local economies.”
Hiring, Not Firing: American small business owners are far more optimistic than not on the hiring front, with 29 percent responding that they plan on adding to their headcount over the next year, and just 6 percent saying they plan on cutting back. That’s encouraging, especially considering that in the past year, 15 percent of small businesses increased staff but 13 percent had to let at least one worker go.
Cash Is a Concern: The very smallest businesses are also the ones most concerned about cash flow going forward. The index surveyed owners of companies from 0 to 500 employees, and those with just 0-4 workers were least likely to respond that they are “very comfortable” with their cash flow situation, and most likely to report being “not very comfortable” or “not at all comfortable.”
So Is the Economy: Sentiment among small business owners is that the American economy is OK, but not great. About 33 percent of respondents believe the U.S. economy is “very good” or “somewhat good, while about 25 percent say it’s “somewhat poor” or “poor.” The rest view it as just “average,” showing a lack of broad conviction in any direction.
We Need to Expand: Capital expansion was a major focus among many small businesses surveyed for the index. A small business CFO for a Colorado manufacturing business highlighted this sentiment, responding to a question about where owners would spend a sudden influx of grant money, “Capital expansion is #1. Our equipment is quite expensive because we are in manufacturing. And, we need to expand our buildings. We are running out of space for machines and employees.”
McManamon & Co. can help you stay on top of the small business world’s growing trends and ahead of the greatest concerns. Consider our business consulting services, which can help you with everything from strategic planning, to hiring to establishing corporate banking relationships.
Call us at 440.892.9088 or contact us online to find out everything we can do to keep you confident about the health of your small business.
Tags: McManamon, small business, small business index | Posted in McManamon & Co., News, small business