The National Federation of Independent Business has released the September Small Business Optimism Index and the numbers were anything but extraordinary after losing 0.1 points and falling to 92.8.
The report is a monthly survey of small business owners’ plans and opinions. It is based on the responses of 691 randomly sampled small businesses in NFIB membership, surveyed throughout the month.
As a result, hiring plans have plunged with job creation plans dropping six points, job openings falling one point and more firms reporting decreases in employment than those reporting increases in employment.
Mason Enterprise Center Regional Manager Susan Henson feels that while small business is struggling nationally, Loudoun County isn’t necessarily seeing those problems.
“We are seeing second stage businesses and entrepreneurs being pretty optimistic, but guarded a little bit,” Henson said. “I think what you find among true entrepreneurs is they don’t let much get in their way, so if they are destined for that, then they will find a way to make it work.
“We are not having any trouble filling the business incubator here in Leesburg if that is any indication,” Henson said. “I have had other folks inquire about potential business incubators in their communities, so I think people are finding more creative ways of supporting business growth, but not letting the economy get in the way.”
Henson acknowledges those creative ways resemble a more grassroots approach to business, where businesses help each other.
“We have started an initiative to build up the technology sector among entrepreneurs interested in getting into tech start-ups. Those are innovative, developmental kinds of technology, like software development and other new innovative ideas,” Henson said. “We pulled together a group called Idea Fusion and we started out just getting together with investors and the group is growing.
“That is a group that helps each other, both entrepreneurs and investors, and we are seeing a lot more peer-to-peer support,” Henson said. “The other way is for communities to band together and build on each others’ strengths. For example, the Mason Enterprise Center here in Leesburg is a partnership between Loudoun County Economic Development, Leesburg Economic Development, the Loudoun Chamber of Commerce and George Mason University to help support business growth in Loudoun.”
According to the report, the 92.8 is still a recession level reading. Since the beginning of NFIB surveys in 1986, the index has been below 93 a total of 56 times; 32 of which have happened since the recovery began in June 2009.
Also in the Optimism Index was the continuation of weak sales plaguing the small business market. The net percent of all owners reporting higher nominal sales over the past three months remained at negative 13 percent. Since April, those numbers have declined 17 points. Twenty-one percent of small business owners still claim weak sales as their worst business problem.
In the press release announcing the results of the report, Nicole Riley, state director of NFIB of Virginia noted the upcoming presidential election has the small business industry in a holding pattern.
“They’re are telling us that the political climate is more of a concern right now than the economy,” Riley said. “Small business owners are in a holding pattern. They’re spending only where necessary, and they aren’t hiring, expanding or ordering more inventories until the future becomes more certain.”
William Dunkelberg, chief economist for NFIB emphasized the importance small business will have in the election.
“The election is just weeks away and essentially a horse-race, and its outcomes would have vastly divergent policy implications,” Dunkelberg said. “Everyone is waiting to see what happens, especially small business owners who have a lot at stake in the outcome – which could mean higher marginal tax rates and more deficits or lower marginal tax rates and less government.”
From her perspective, Henson believes small business is a solution in solving economic issues.
“Small business is definitely going to be a key factor and I think we have heard that across all parties. It is certainly a key factor,” Henson said. “It is a much easier ship to turn, if you will. The beauty of a small business is it is very flexible, very nimble and it can respond quickly to changes in the marketplace, so just on that fact alone that they are very flexible, will allow them to get some good leverage on the economy in terms of moving forward.”
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