More women-, minority- and veteran-owned businesses plan to bolster
staff, capital spending in 2014
The survey found that an increasing number of respondents believe the small business climate will continue to improve in the next two years. The improving outlook reflects survey data that show significant increases in the number of entrepreneurs working longer hours due to increased business in 2013 and in the number of owners planning to add full-time staff this year.
Despite a four percentage point rise in layoffs, most respondents plan to maintain the same staffing and capital expenditures, with more businesses (26 percent, up 3 points) planning to boost capital spending and fewer companies (6 percent, down 2 points) anticipating layoffs in 2014.
“These results reflect the optimism we’ve seen among small business owners as they continue to generate new business and expand, but with an eye toward restraint given past economic challenges,” said Union Bank Executive Vice President
Overall, respondents report a steady increase in optimism about the direction of the national economy and their state’s economy. While the majority of entrepreneurs (59 percent) still believe the national economy is headed in the wrong direction, there was a significant increase in those who believe the national economy is headed in the right direction (41 percent), up 10 percentage points from last year and up 16 percentage points from 2012. In terms of the economic outlook in the state where their business is located, while 51 percent believe it is headed in the wrong direction, 49 percent believe their state is headed in the right direction, up eight percentage points from last year and up 15 percentage points from 2012.
Among the industries surveyed, those from the professional services industry (physicians, certified public accountants, attorneys, etc.) remain the most optimistic with 51 percent believing in the direction of the national economy, up 14 percentage points, and 62 percent believing in the direction of their state economy, up 13 percentage points.
Respondents from the personal services industry (auto repair, salons, dry cleaning, etc.) were the most pessimistic about the direction of their state economy with 63 percent believing it’s headed in the wrong direction. They also ranked among the most pessimistic about the direction of the national economy with 72 percent believing it’s headed in the wrong direction, second only to retail store owners at 73 percent.
Labor and Capital Spending
Following a year of increased sales for more than a third of businesses, most entrepreneurs maintained stable costs. Overall, there was no change in the number of respondents planning to add staff (15 percent).
Of those planning to increase staff, 69 percent plan to hire full-time staff, up 14 percent from last year, and 31 percent plan to hire part-time staff, down five percent from last year. The rise in the number of respondents planning to hire full-time staff coincides with another part of the survey that which found that more respondents than last year (55 percent, up 11 points) worked longer hours in 2013 due to increased business.
“Small business owners are working harder than ever,” says Hollander. “We recognize how critical it is to support entrepreneurs and their companies as part of rebuilding this country’s economy.”
Among the industries surveyed, the majority plan stable staffing, with retail stores anticipating more staffing additions (17 percent) and cuts (10 percent) in the coming year than all other industries surveyed. The personal services industry was the only industry not planning employee cutbacks.
Businesses in the construction or engineering fields (39 percent) incurred significantly more employee cutbacks than respondents in all other industries surveyed and continue a slight upward trend in layoffs with a two percentage point climb from last year and a four percentage point increase from 2012. Retail stores report the fewest layoffs (19 percent), followed closely by the professional services industry (20 percent).
For capital spending, those from the construction or engineering fields indicate the most pessimistic outlook with 22 percent planning cutbacks, up five percentage points from last year.
Diverse Businesses Outlook
While nearly a third of women-, minority- and veteran-owned businesses incurred layoffs in 2013 and one in five plan an out-of-state move in 2014, more women-, minority- and veteran-owned businesses report optimism about the overall economy, the direction of their business and plans for increased hiring and capital spending in 2014 than non-certified businesses.
More women-, minority- and veteran-owned businesses (29 percent, up 11 points) plan to bolster staff this year than the previous year. Nine percent of non-certified businesses plan to add staff in 2014, down five percentage points from last year. For capital spending, 37 percent of women-, minority- and veteran-owned businesses plan to increase capital expenditures, up 11 percentage points from last year, while 20 percent of non-certified businesses plan to increase capital spending, down two percentage points from last year. More respondents from women-, minority- and veteran-owned businesses (43 percent) report increased sales in 2013 than the previous year (32 percent). Thirty-four percent of non-certified businesses report increased sales in 2013, down three percentage points.
Significantly more women-, minority- and veteran-owned businesses (28 percent) report benefiting from the Small Business Jobs Act than non-certified businesses (13 percent) and were more likely to apply for a loan or access to credit in 2013 than those from non-certified businesses. Twenty-eight percent of women-, minority- and veteran-owned businesses applied for a loan or access to credit in 2013, up 16 percentage points from the previous year, while 14 percent of non-certified businesses applied for a loan or access to credit in 2013, down two percentage points from the previous year.
“These findings reflect the interest we are seeing among more multicultural businesses to apply for loans, and this is a good indication that diverse business owners are optimistic about the future,” said Union Bank Senior Vice President and Public Affairs Manager
The survey reflects that certified businesses indicate having applied for a loan/access to credit significantly more than non-certified businesses, and access to credit also remains important for small business owners in general. Overall, 19 percent of respondents applied for a loan or access to credit in 2013, a five percentage point increase from the previous year, and respondents report easier access to credit in 2013 than the previous year. Of those who applied for a loan, significantly more were approved (78 percent) than the previous year (62 percent).
About the Survey
Union Bank, working with its survey provider, surveyed 500 respondents (400 in