The reports are out. As we discussed yesterday, the NFIB’s Small Business Confidence index had risen over the past 6 months, which means small businesses are feeling generally more optimistic about the future. So, with small business confidence on the rise, what does this mean for you as a small business owner? Experts suggest preparing your small business cautiously, but optimistically, for a positive future.
Dear Small Businesses: Get Ready For Good Times
Things are looking better
Job creation, optimism about sales and access to financing appear steady. Nonetheless, this positive outlook is simultaneously met by some job loss, downward trending sales and concern about future access to credit. So while small businesses should look on the bright side, they should act prudently.
A recent survey by Wells Fargo Gallup also provides a promising faith in the future for small businesses. According to the survey, 49 percent of small businesses owners believe revenue will increase over the next 12 months. More than half of respondents (63 percent) go so far as to say they expect their finances to be very or somewhat good in the upcoming year. These optimistic outlooks appear to result from positive changes, such as lower delinquencies in payment, according to the head of Wells Fargo.
Another survey by PwC reports even higher confidence numbers, as 78 percent of executive respondents anticipated growth over the next year. Hopefully these favorable indicators will create a positive feedback loop, and small businesses will take advantage of this optimism to grow.
Financing for growth
Growing your small business will likely require some capital. Optimism gears you toward the future, and ideal financial planning means anticipating your needs early. You do not want to find yourself facing a cash flow crunch right when you want to grow. According to the Small Business Administration, needs are most critical during transitional stages. Changing your business structure will often require a reasonable cushion for unanticipated expenses. Reserve capital can come in the form of cash or even accounts receivables, if necessary. When preparing to finance for growth, seek out creative ways of generating working capital, such as crowdfunding.
Tax breaks for growing businesses
Luckily, the government often offers tax breaks for small business expansion. For example, the IRS has offered a tax credit for hiring employees who were previously unemployed. Small businesses can also write off a large portion of new equipment purchases and certain investments. As part of the Small Business Jobs Act, small businesses are exempt from paying capital gains taxes on key investments.
You should build your roots now for your business to blossom in the future. In an article with news outlet VegasInc, experts advise close profit-to-loss analysis and utilizing social media. Benchmarking your own small business’ progress keeps you on track for long-term growth. Close management means you can more readily spot waste and find room for improvement.
For growth spurts, the financial consulting site SCORE, recommends hiring a chief financial officer to oversee your growth, even on a part-time or consulting basis. If this is not financially feasible, small business owners are still advised to delegate the expanding responsibilities of a growing business.