When the Great Recession hit, banks slammed their doors shut, especially on small businesses. As a result, it was incredibly hard for companies to grow—they couldn’t invest in new technology, employees, marketing campaigns, or equipment. We all know what happened: a self-defeating, thoroughly depressing cycle.
There is a light at the end of the tunnel, and we’re actually driving through it right now.
Even during the recession, the 5th wave of the Small Business Success Index (SBSI), which was published last month, uncovered some very encouraging stats: during a rather bumpy 2010, 38 percent of small businesses experienced a gain in sales over the previous year, compared to only 15 percent who experienced a decline.
As I wrote about in my previous blog post, Small Businesses Suck at Marketing…But Not Social Media, the SBSI is based on a survey of small business owners that is conducted every 6 months. It measures the competitiveness of small businesses compared to larger companies, and it is based on 6 criteria: capital access, marketing/innovation, workforce, customer service, computer technology, and compliance.
As a result of a strong push forward in 2010, optimism for the future is at an all-time high. For the first time in two years, more small business owners think the economic climate is “improving” rather than “worsening” (35 percent compared to 19 percent). Small businesses are also more optimistic about the outlook for the economy in the next 12 months than a year ago, with only 15 percent believing the economy will decline compared to 26 percent who believed this a year ago. Also, the percent who feel they were impacted by the recession hit a peak last year and is starting to decline.
With strong sales and a positive outlook comes hiring. Many small businesses (28 percent) are planning to add staff in 2011 to expand (73 percent). If small businesses carry out their hiring plans, they will add a total of 3.8 million jobs to the U.S. economy this year and potentially reduce unemployment numbers by 2.4%. The main reason for adding staff is to expand the business (73 percent), while 32 percent are trying to decrease the workload of existing staff who are struggling to keep up with the turnaround.
Before you start looking to join a small business as an employee, understand that working for a small business requires certain traits: experience working in a small business, a flexible mindset, and a broad skill set. If you need a lot of structure, best to stick with a large company.
All is not happy-happy, unfortunately. The SBSI also found that, compared to a year ago, small businesses face greater problems with training and developing staff and maximizing staff productivity. And just as small businesses lack confidence in their ability to position themselves as having the same capabilities as the big companies in their industry, less than half (46 percent) of small businesses believe they are successful in competing with other companies for good employees.
Still, things seem to be looking up for small businesses, and for all of us small business owners (I am one, too!) who were a little panicked during the recession, this is something to celebrate.
Image via Flickr (Creative Commons) by epSos.deGoogle+