Just How Optimistic are Small Business Owners?
For the first time in six months, entrepreneurs are feeling a bit more hopeful—even if it’s just by .08%.
The National Federation of Independent Business' Small Business Optimism Index grew for the first time in 2011 to 88.9% from 88.1% in August, however, much of the index's components remain in negative territory.
The index reported that sales were still small business owners' No.1 concern, and that -22% of business owners are expecting better conditions in the next six months.
Here's what small business owners had to say about the NFIB index, and if it is in alignment with their outlook during this economic climate.
School House, Inc. Durham, N.C.
Rachel Weeks, founder and CEO of college apparel maker School House, said that while the index does resonate with her as an entrepreneur, she said her business is faring better than most in the weak economy. With that said, she continues to struggle to find affordable financing.
"While I agree with Bill Dunkelberg (chief NFIB economist) that a number of small businesses are suffering from low sales, that is certainly not everyone's challenge in this economy. Our company has plenty of demand and tremendous opportunity in the collegiate sector, a $4 billion niche industry that is growing despite the economy," Weeks said. "Our challenge has been access to affordable debt financing given that banks still have zero appetite for risk, leaving us to factor our purchase orders at the exorbitant price of 4% a month in interest rates."
Weeks recognizes the role she must play to generate brand awareness and spur consumer spending, she also said the government should help small businesses in more tangible ways.
"The government could bolster small business growth by collateralizing loans, or offsetting the investment of new hires on the front end rather than extending tax credits geared toward larger established businesses. We have to help start-ups make growth happen today, not next tax season. I have little--to no--faith that government policies will play a role in our success or benefit us in any real way during this downtown."
But her positive attitude keeps her going.
"As an entrepreneur and a small business owner, you always have to maintain a spirit of optimism to overcome the hurdles thrown to you every day," Weeks said. "While my optimism regarding the economy in general is not strong, I believe my company will succeed despite the fact that the cards sometimes seem stacked against us. That's part of what being an entrepreneur is about, during any economic moment in history."
HiLo Tickets , LLC. Wilton, Conn.
Rob Perez, principal of HiLo Tickets, said despite launching in a weak economic environment, the company is very optimistic right now. He added that having a positive attitude is what will propel the business to the next level.
"The first step of being a successful small business is believing that your idea or product will work," Perez said. "If you don't, you might as well board up the shop and head home. The way we see things: if there are no jobs, the economy stinks, and the stock market is stagnant, it is a great opportunity to 'buy low.'"
The notion of “buying low” is what HiLo Tickets is all about: his company sells tickets for major concerts, plays and sporting events in a penny-auction format online. Perez said his company is poised for growth because of its ability to attract conservative spenders.
Being an entrepreneur means constantly evolving, a lesson Perez and his business partner have learned through starting out in a rough economic climate, he said. For this reason, they are right on board with the NFIB's optimism index.
"Regardless of where the economy is, small business owners can only survive if they are willing to immediately pivot and adapt to their ever-changing consumer base. We are optimistic because the hard times allow us to take a different and potentially more-profitable type of risk with our business model, as to when everything and everyone is prospering," he said. "This slight bump in the NFIB's Business Optimism Index is a direct result of these entrepreneurs slowly finding their niche within the 'necessity' market."