[IMGCAP(1)]Small businesses are the lifeblood of the U.S. economy and a big reason why millions of Americans have jobs and successful careers.
When looking at the impact of small businesses and startups on the overall economy, it’s impossible to ignore the difference they’re making in their local communities. Small businesses create jobs, spur local economic growth, and are leaders in innovation. For these and many other reasons, our country is dependent on the success and strength of our small business community. When small business owners are optimistic about their future, have plans to grow their business and are turning profits, we all benefit.
In 2014, the Paychex | IHS Small Business Jobs Index has shown steady growth in small business employment, and in April, the index rose to its highest point since tracking of the index started. Business owners are feeling the same positive trends we’re seeing in the data, according to a recent Paychex survey of startup business owners.
According to the survey, small business owners entered the current year with a high degree of optimism, with 94 percent of small business owners being optimistic about their company’s outlook. When asked about their expectations as compared to the previous year, approximately three-quarters expected revenues and profits to be higher. Optimism is an important indicator to follow, as it provides insight into how business owners think and the state of small business in general. And when small business owners are optimistic about their business, we are too.
In the same survey, 69 percent of small business startups said they plan to hire in the next year. Fifty percent said they plan to hire in the next six months, and 19 percent plan to hire in the next six to 12 months. While there is never a guarantee that a certain level of hiring will take place, this seems to be a continuation of the slow and steady growth trend we’ve seen in small business hiring in the past few years.
There is a tremendous trickle-down effect that takes place when small businesses hire more people. When more people have jobs, it means there are more people making money, more people spending money, and more communities benefiting from a stronger economy.
Profitability is another important factor when looking at the state of small business. According to the small business startup survey, 79 percent of startups report annual revenue of less than $1 million, and 17 percent report annual revenue of more than $1 million.
Even more importantly, 71 percent say their business is profitable. Studies show that more of the money spent at a local business stays in the local area. That means revenue-generating, profitable small businesses equate to job security for employees, new employment opportunities for the local workforce, and a growing and strengthening economy for everyone in the community.
Take time to recognize your small business clients and their efforts that have positively impacted your community, your economy and your own business.
Martin Mucci is president and CEO of Paychex, Inc.