Small business development is an important
contributor to national growth. Recent polls by the Fargo/Gallop Small Business
Index and the HR services company TriNet show that small businesses are more optimistic than
at nearly any time since the recession started. At present the trend appears to
be growing and small businesses will need additional access to credit,
investment, and other financial services to ensure their businesses continue to
grow.
A Fargo/Gallop Small Business Index of 600 small
business owners conducted on March 31st, 2014 indicates that small
business owners are more optimistic now and for the next 12 months than at any other
time since 2008. The numbers help support the idea that small business owners
feel their chances of growth are improving and may be willing to invest more of
themselves into their businesses to further their opportunities.
The numbers have been generally rising since 2010
but are now at a level that indicates optimism is growing at a significant rate.
This positive momentum is still about half what was experienced during the
pre-recession times of 2004-2007 but do highlight the idea that there is still plenty
of room for economic growth. You may obtain more information HERE.
Another recent metric called the Small Business
Confidence Survey conducted
for TriNet by Harris Poll found that 74% of small business owners feel that
their business will grow in 2014 (2). Of the 206 small participating businesses who
have10-49 employees 50% indicated they plan on hiring more employees in the
next year. They were generally concerned with obtaining new business, controlling
expenses, and ensuring steady cash flow.
Why foster
small business? Small business has a huge impact on economic growth in society.
According to the Small Business Administration 66% of all new jobs since the
1970’s and 8 million jobs (big business eliminated 4 million jobs) since the
1990s were generated from small business (3). Small business has the mobility to adjust to
the market even though they often lack the financial resources found in
investment capital and credit.
Research
by Lahm, et. al (2011) shows that a lack of capital for small businesses during
the recession has forced many small entrepreneurs to rely heavily on credit
cards. Changes within the cash equivalent market have impacted their ability to
maintain that credit which further hampered their growth. Finding methods of
improving small business credit scoring and access to capital helps in
furthering the economic recovery.
The
optimism within the small business market and difficulties in securing credit
to expand their businesses help emphasize the problem that small investors and
larger pool investors may benefit by being connected to small business entrepreneurs.
Risk can be hedged over many small businesses in multiple sectors while new
technology makes it possible to pool many small investors that seek to grow
their portfolios. New technology is
changing the way investment and business is conducted. When proper tools are
available and well known it very well may have an impact on the economy.
Lahm, J.
(2011). Small business and credit cards: new rules for plastic in an economic
recession. Journal of Marketing
Development & Competitiveness, 5 (5).
