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2013-05-21

Small Businesses Are Not Feeling Recovery in US: Survey

Small business owners say they are not yet feeling the effects of an improving economy, and most are not rushing to hire or seeking funds to invest in their businesses.

Small Businesses Are Not Feeling Recovery in US: Survey

Small business owners say they are not yet feeling the effects of an improving economy, and most are not rushing to hire or seeking funds to invest in their businesses.

In an exclusive CNNMoney-Manta survey about the state of small business today, more than a third of owners polled said the US economy is in better shape than last year. But most say their own customers are not spending freely, and only 40 per cent are reporting stronger sales.

No wonder just 14 per cent said they are adding more workers than last year, while two-thirds are not hiring at all. "Business is too unstable," said one respondent. "I can't afford to hire anyone else at this point." Most (65.6 per cent) aren't seeking additional financing either.

Entrepreneurs cite the economy (31 per cent) and increasing costs of doing business (23 per cent) as the issues weighing most heavily on their minds. Because of those two factors, "small companies have to take a greater hit to the wallet to compete with big businesses," wrote one respondent. "It is almost better to have a nine-to-five job than to be your own boss."

Others mentioned regulations (16 per cent) as their biggest concern. Taxes were a popular write-in vote, although the survey did not specifically list that option.

Health care is another issue that is top of mind for small firms. But the survey results showed that many business owners are still trying to understand what effect Obamacare will have on their companies.

Under the Affordable Care Act, firms with 50 or more full-time workers will have to provide health insurance to those employees in 2014.

Only 10 per cent of respondents said the health care law would help them, while 38 per cent of respondents said it will hurt. The rest said it wouldn't affect them or didn't know what impact it will have.

"The new laws are so convoluted that it makes it hard to know what's coming," said one business owner.

Another business owner was sure that Obamacare would hit his business hard, saying, "I may lose my best employees because I cannot afford [health] insurance."

Despite the challenges, 63 per cent said they consider the United States to be the best place to open a small business. Many cheered the benefits of a free-market economy. Others said there are lots of resources here, making it relatively easy to launch a start-up.

"There is not another country in the world where small business has the multitude of opportunities like the US," said one owner.

Another said, "This country was built for business."

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