Last Friday, I stopped by my favorite family-owned bakery in Hampden to bring fresh pastries and donuts to our team at the office. This sign was hanging on the front door of the empty storefront: “Closed after 88 years [The Economy won].”
A very troubling “sign of the times.”
These are indeed challenging times for small businesses, and the most recent reports do not offer much optimism.
According to Small Business Labs (reporting in their post Small Business Employment Confidence Stalled), despite small gains in small business hiring, we need “roughly 8 million jobs to recover to pre-recession levels. It's going to be a long road back unless small business picks up.”
This was followed by reporting over at Going Concern in their post, Latest Grant Thornton Business Index Reaffirms That No One Has Any Idea What is Going to Happen Next. Here's what Going Concern had to say:
“Grant Thornton LLP’s Business Optimism Index, based on a quarterly survey of U.S. business leaders, decreased significantly to 58.4 in August from a recent high of 67.6 in May. Business leaders are again becoming pessimistic, with only 34 percent expecting the U.S. economy to improve in the next six months, down significantly from 63 percent in May. The hiring outlook has also dimmed; only 38 percent of business leaders report that their companies will ramp up hiring in the next six months.”
Then there's this post, Intuit, SurePayroll See Weak Economy, over at CPA Trendlines, where a few “bright spots” were reported: “While employment is up this month, it is, like last month, up less than the month before,” said Susan Woodward, the nationally recognized economist who worked with Intuit to create the Index. “While this slower growth rate is disheartening, the news is not all bad. Both compensation and hours worked are dramatically up, while employment is slightly up across most of the country. These latter signs indicate a continued general recovery despite slowing growth in employment.”
Finally, there are the latest results from Sage Business Minds Survey. When asked about actions taken in the last six months as a result of economic conditions, those focused on cost-cutting were most popular among respondents.
Jamie Sutherland, vice president of Sage Small Business, said cash flow management is the number one issue facing small business; the business owners either neglect it altogether or have difficulty managing it. Look for an upcoming interview we will be podcasting with Jamie.
So what can we do as CPAs (many of whom are small businesses themselves)?