Few Small Businesses Employ Bookkeepers or Accountants
Only 33 percent of small businesses employ a bookkeeper, according to a survey by Palo Alto Software, and an additional 50 percent say they also do not plan to hire one this year.
The survey also found that only 23 percent of small businesses employ a non-CPA accountant and 66 percent do not plan to hire one. Another 29 percent do employ a CPA, 17 percent plan to hire one, but 54 percent do not plan to hire one.
In addition, 18 percent of the small businesses surveyed have a financial advisor, while 20 percent want to hire one this year.
The report was based on a survey of almost 400 small businesses in January 2014, and found that small business owners who regularly plan and track their business’ financial metrics expect more growth in 2014. According to the survey, 79 percent of companies with a business plan say they are better off financially compared to a year ago, while only a third of small businesses without a business plan can say the same thing. In addition, nearly 75 percent of established companies that have a business plan in place expect to grow more than 10 percent in 2014, compared to only 17 percent that don’t have a business plan.
“Setting goals for your business is not as useful if you don’t you develop a plan for how you’re going to reach those goals and track your progress regularly,” said Palo Alto Software CEO Sabrina Parsons in a statement. “By setting your goals, communicating with your employees on how to achieve those goals, and then managing your actual results to those goals, you set your business up for success.”
The survey also found that the more often companies track their financials, the more likely they are to grow. Seventy-one percent of small business owners who check their key metrics at least weekly expect to grow revenue by more than 10 percent in 2014, compared to 59 percent who never compare planned and actual results.
Small business owners are also optimistic about the year ahead. A majority of small businesses with revenue anticipate revenue growth in 2014, and only a very small percentage expect a decrease. While 91 percent expect an increase in revenue in 2014, 30 percent said they anticipate to grow by 50 percent or more.
In addition, 69 percent of the small businesses surveyed said they expect to hire between 1 and 10 employees this year, while 8 percent expect to hire more than 11 employees. Eighty-one percent of the small businesses surveyed said they are more optimistic about their company’s finances than they were a year ago, while 75 percent said they are about the same or better off financially than they were 12 months ago.
The survey found that external political and economic factors have played a relatively small role. In fact, 69 percent of survey respondents said the implementation of the Affordable Care Act had no effect on their ability to plan and grow their businesses. The only thing that seems to hold SMB owners back is a lack of funding. Forty-one percent of SMBs say that access to capital has made it more difficult to grow their business over the past year.
“Small business owners are hungry to find ways to grow their business,” said Parsons. “Those that plan ahead can handle any economic setback that comes their way. They’re not optimistic only because of the improving economy, they’re optimistic because they’ve taken matters into their own hands, and understand what it takes to reach their goals.”
To download the complete “Q1 2014 State of Small Business” report, click here.