Folk singer Richard Farina's book, “Been Down So Long It Looks Like Up to Me,” are the words that best describe the state of small business today.
According to NFIB’s Small Business Trends February 2010, the Index of Small Business Optimism gained 1.3 points, but optimism about the economy has stalled. Small business was depressed at the start of 2009 and has remained about the same a year later.
The trends show no improvement in job creation, capital spending rose slightly but is historically weak, and the net percent of all owners reporting higher nominal sales in the past three months remained negative.
Translation: Many are talking about being up because it’s better than facing the fact that they are not making significant improvements in sales or other categories.
What can turn things around?
Washington’s efforts to increase access to capital are nice but not essential to an economic recovery. The NFIB Trends shows that only 5% identified financing as a top problem; 31% cited poor sales as a much bigger concern.
The tax incentives to stimulate job growth that are under consideration in Washington miss the mark. Businesses don’t hire because they are rewarded to do so; they hire because they need the help when business is up.
Business won’t improve until there is a sustained and marked increase in consumer confidence, which will translate into more sales for small business.
The Conference Board’s Consumer Confidence Survey released at the end of January showed some improvement, but we have a long way to go!