Small business owners still cautious, surveys find
Associated Press | May 13, 2014
Small business owners are keeping a cautious approach to running their companies even as they grow more optimistic.
Two surveys released Tuesday, one by Wells Fargo & Co. and the other by Bank of America Corp., found many owners still have conservative hiring plans and little appetite for loans.
Stronger revenue and cash flow are behind the increasing optimism. In the Bank of America spring survey, 68 percent of owners said they expect revenue to increase in the next 12 months. They feel confident about their local economies but have their eye on national and international issues that could affect their businesses.
About three-quarters cited health care costs and the federal government’s effectiveness, or lack thereof, as potential problems. Seventy percent are concerned about higher commodities prices.
Wells Fargo’s second-quarter Small Business Index rose to 47 from the first quarter’s 45, its highest level since the second quarter of 2008, before the financial meltdown. That was still far below the high of 114 hit in December 2006, but much better than the minus 28 posted in the third quarter of 2010.
The Wells Fargo survey found owners are gradually getting more optimistic about the prospects for their companies’ financial situation a year from now. Sixty-seven percent forecast their businesses would be in good shape, up from 66 percent in the first quarter. Fifty-nine percent expect their cash flow to be good over the next year, up from 57 percent.