In an economy that's experienced dramatic growth – evidenced by bustling gross domestic product numbers and a plethora of hiring – small-business owners appear to be among the chief contributors to the economy's health, based on a newly released survey.
A majority of small-business operations in the U.S. last year saw rising revenues, according to the National Small Business Association's year-end economic report. With 53 percent reporting higher earnings, that's the largest share in 20 years.
21% experienced revenues of between $1 and $5 million in 2017."
In terms of how much they made, 57 percent reported gross sales of between $100,000 and $5 million, according to the NSBA's analysis. More specifically, 21 percent pulled in receipts of between $1 million and $5 million last year.
Nearly 85 percent confident about continued success
It perhaps comes as no surprise, then, that owners are feeling rather optimistic about what's ahead. Indeed, 8 in 10 small firms indicated they're confident about what the future holds for them and the fate of their companies, the NSBA survey showed.
Todd McCracken, NSBA president, noted small-business owners' sentiment has dramatically improved from where it used to be, especially during and in the immediate aftermath of the Great Recession, when the national unemployment rate was flirting with double digits.
"In the past two years, the number of small-business owners who say they expect to see an economic expansion in the next year has more than doubled," McCracken explained.
Small-business owners' bullish attitudes provide added context to a separate poll, which revealed nearly three-quarters of entrepreneurs worldwide primarily create their companies for opportunistic reasons, rather than out of necessity. That's according to a joint survey conducted by Babson College, the Korean Entrepreneurship Foundation, Universidad Del Desarrollo and the UniversitI Tun Abdul Razak. Thirty percent of companies intend to do more hiring over the next five years.
Hiring has been a common activity among small businesses in the previous five years as well. Thirty-seven percent of them have increased the size of their part-time employee base, according to the NSBA year-end report. Only 17 percent cut their staffing level over the same period, primarily by reducing workers' hours, as opposed to layoffs. Much of the hiring has been performed by small businesses, which account for the vast majority of companies in the country, in excess of 95 percent, according to data from the Small Business Administration.
"1 in 4 expect to hire more with increased automation reliance."
Automation may create more jobs
But to trim on labor costs and be more nimble, some companies – primarily corporations – are turning to automation to perform some of the more menial tasks that actual workers have chiefly been responsible for. Economists have warned that this development could spell trouble for employees' job security. Among small businesses who intend to use automation in some form within the next 12 months, nearly a 25 percent say their doing so will likely result in more hiring, not less, according to the NSBA's report's findings. Just 9 percent said their worker base may narrow because of automation implementation.
Downsizing is something that few small businesses are doing at the present, however. In fact, in the National Federation for Independent Business' most recent Optimism Index, there was a two-point uptick in the share of polled firms believing the current economic climate made it a good time to consider expansion.
"Main Street is roaring," said Juanita Duggan, president and CEO of the NFIB. "Small business owners are not only reporting better profits, but they're also ready to grow and expand. The record level of enthusiasm for expansion follows a year of record-breaking optimism among small businesses."
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