The most recent NFIB survey results reported that small business optimism gained 0.8 points in September, ending a six month decline. However, much of the index’s components are still in negative territory.
Poor sales remain top of mind for small business owners, with negative 22 percent expecting better conditions in the next six months. While sales expectations are up from August, they still remain lower than January.
Why is Small Business Optimism a Meaningful Metric?
Small business owners are the most resilient, optimistic people around. Most small business owners started from scratch and worked day and night to build their business. All the while, they faced obstacles at every corner including pressure from family, difficulty finding financing, taking on responsibility for management tasks they know nothing about, and having to use the most creative, scrappy ways imaginable to market their business on a shoestring budget to help them stand out against larger competitors.
The point is, facing a tough situation is absolutely nothing new for a small business owner. They perform heroic acts every day to keep their business alive. So if small businesses are feeling down in the dumps, we should all be paying attention.
So Your Usually-Upbeat Pal is a Feeling Sad, What’s it to You?
We’ve all heard it before, small businesses are the life blood of our economy. Certainly an overly used phrase, but the facts are right in front of our faces. Small business owners create about 70% of new jobs and account for half of our GDP. That’s a big deal.
Beyond the big stats,”a recent study by American Express shows that having a thriving small business actually increases home values in the area.” The report found that home values in neighborhoods with thriving small businesses outperformed their broader markets by 4% per year and 50% cumulatively over the past 14 years. I don’t think there’s anyone out there today that wouldn’t benefit from a boost in the value of their home.
What Can You Do to Give Small Business Optimism a Boost?
It seems we all agree that it’s important to support small businesses. According to a recent survey from American Express, 93% of respondents believe that it’s important to support local small businesses. And on average, they spend about one third of their monthly discretionary income at these stores.
But based on the optimism index, we need to spend more at small businesses to help turn the economy around. So, with the holidays approaching, it’s a great time to closely examine your shopping habits and whenever possible, make your purchases from a small business. Taking part in initiatives such as Small Business Saturday can go a long way toward helping the lifeblood of our economy put on a happy face.
And if small businesses start to thrive more, perhaps we’ll even be able to help the unemployed join the 9% of laid-off workers who’ve decided to start a business and take personal part in helping our economy move forward.