Survey: Small biz owners pessimistic about 2013

2 min read ·


NEW YORK (AP) — Less than half of small business owners expect their companies to grow in 2013, in the face of stagnant sales growth and expectations for a flat or recessionary economy in the coming year.

That's the latest finding of the lobbying group National Small Business Association, which surveyed more than 400 of its members for its year-end economic report. The survey found that owners' confidence about their companies' futures has fallen sharply from the end of 2011 when three-quarters of owners were confident in the outlook for their businesses. At the end of 2012, less than two-thirds expressed confidence.

More than two-thirds of owners say the economy is the biggest challenge to the future growth and survival of their companies, followed by weaker customer spending and regulation. Most owners think Congress and the President should make cutting the national deficit the top priority, with 74 percent advocating for reforming and cutting entitlement spending.

The NSBA noted that the timing of the survey — it was taken from Dec. 31 through Jan. 14 — meant that some business owners were taking part before Congress resolved its impasse over the "fiscal cliff," the tax hikes and budget cuts that were scheduled to take effect Jan. 1. Lawmakers limited income tax hikes to individuals earning at least $400,000 and couples earning at least $450,000 (instead of $250,000). Budget cuts also were postponed until March 1. However, the NSBA and other surveys have shown that the debate had a chilling effect on small business owners' optimism and plans for the future.

Many owners still have no plans to hire in the near term. Sixty percent of those surveyed said there will be no change in their staffing levels in the next 12 months. That number has hovered between 60 percent and 63 percent since July 2011. But more layoffs are on the table with 16 percent planning to cut staff, compared with 12 percent in July and 8 percent a year earlier. Just one-quarter plan to hire, unchanged from July and down 5 points from December 2011's 30 percent.

The survey also asked owners about their plans for health insurance coverage when the new health care law is fully implemented in 2014. Nearly two-thirds say they still have only limited understanding of how the law will affect their businesses, which is feeding a large amount of indecision about coverage plans.

Businesses with more than 50 employees will be required to provide affordable coverage for their workers, and 71 percent of those company owners surveyed said they already offer insurance and will keep doing so. Only 3 percent said they plan to pay the federal penalty rather than buy the insurance, but only 3 percent also said that they will begin offering coverage under the new law. Nearly a quarter aren't sure what they will do.

Among owners who have fewer than 50 employees and who are exempt from providing coverage, 32 percent said they currently offer insurance and will continue to do so. Nineteen percent said they won't offer insurance, and 3 percent said they'd give employees money to help pay for individual coverage. Nearly half of those owners also aren't sure what they'll do.