CPA Practice Advisor

OCT 2018

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36 OCTOBER 2018 ■ www.CPAPracticeAdvisor.com THE SMALL BUSINESS CHANNEL Small Business Optimism Hits New Highs By Isaac M. O'Bannon, Managing Editor Small business optimism is at an all-time high in a new study. The latest quarterly Wells Fargo/Gallup Small Business Index, which measures small business optimism, had an overall Index score of 118, 12 percentage points higher than last quarter and the highest level in the survey’s 15-year history. The current Index score was driven by high indicators from small business owners on their overall financial situation, cash flow and ability to obtain credit. The news comes as the U.S. economy grew 4.1 percent in the second quarter, according to the U.S. Department of Commerce, outperforming an average growth rate of 2.3 percent from the fourth quarter of 2012 to the first quarter of 2018. “Small business owners continue to feel confident about their business’ current and future financial situation as the economy continues to show positive growth,” said Andy Rowe, Wells Fargo head of Customer Segments. “We are hopeful the unprecedented optimism among business owners will translate into an increase in business investments, and more Main Street small business growth.” Positive financial outlook Confidence in the economy was reflected in small business owner attitudes about their current and future financial situation. In the July Wells Fargo/Gallup Small Business Index, 78 percent of small business owners reported their financial situation today is very or somewhat good, and 84 percent of business owners said they expect their financial situation will be very or somewhat good a year from now. In addition, both current and projected future cash flow were key drivers of small business optimism, with 69 percent classifying their cash flow over the past 12 months as very or somewhat or good, an increase of 6 percentage points from the previous quarter and the highest reading in the history of the survey. Over the next year, 77 percent expect their cash flow to be very or somewhat good. Small business owners also reported on their ability to obtain credit when they need it, with 49 percent saying they expect it will be very or somewhat easy to obtain credit over the next 12 months. That’s up five percentage points over last quarter and the highest reading on this measure since 2007. Even as optimism soared, small business owners’ sentiment about their company revenues remained relatively consistent with the previous quarter. About half of respondents said their revenues increased over the last 12 months, and 61 percent said they expect company revenues will increase over the next 12 months. Challenges in hiring and retaining staff remain For the second consecutive quarter, survey respondents said hiring and retaining staff was their top challenge, at 18 percent. It could remain a challenge in the year ahead, as 35 percent of firms said they expect an increase in the number of jobs at their company in the next year. Other top challenges cited by business owners include taxes (9 percent) and attracting new business (9 percent), which have been consistently reported among the top issues of small business owners. Continued online at www.CPAPracticeAdvisor.com/12428988 LATEST SMALL BUSINESS NEWS Most Small Business Owners Unprepared for Cyber Crime. Small businesses are leaving themselves exposed to significant financial risk from cybercrime by not having adequate measures in place to recover. www.cpapracticeadvisor.com/12430509 Entrepreneurs Lead the Way in Philanthropy. Entrepreneurs donate more to charity on average than non-business owners, according to a study by Fidelity Charitable. www.cpapracticeadvisor.com/12430495 11 Reasons Now is a Good Time to Start an Ecommerce Business. The online market is expected to grow 56% by 2020, with other traditional markets only expected to experience 2% overall growth. www.cpapracticeadvisor.com/12429330 68% of Small Businesses Lack a Disaster Plan. Hurricane Florence recently dealt a harsh blow to the East Coast, yet most small businesses don’t have a plan for if the storms affect them. www.cpapracticeadvisor.com/12429207 Sales Tax Exemptions: Collect the Tax or Get the Doc. For every taxable transaction making its way through the marketplace, somebody should be collecting sales tax. www.cpapracticeadvisor.com/12428983 Colleges and Students Embrace Entrepreneurship Courses. The 2008 recession turned a lot of students toward entrepreneurship as they watched their parents lose jobs they held for decades. www.cpapracticeadvisor.com/12428065 This Month's Top SMALL BUSINESS Social Media Posts How Companies Can Get Creativity Right and Wrong. Harvard Business Review. https://bit.ly/2xne2TN 3 Rules to Setting Goals for Your Business. Inc. BrandView. https://bit.ly/2pm5k41 8 Podcasts by Boss Women. Entrepreneur. https://bit.ly/2NlChfj 10 Expert Tips to Creating Repeat Business. SmallBizTrends. https://bit.ly/2QJidl4 Sole Proprietor vs. Single-Member LLC. SCORE Blog. https://bit.ly/2DaVwDJ

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