It is a well-known saying that small businesses represent the backbone of the economy, especially here in the United States. Well, that saying appears to be more valid than ever for a number of good reasons. Let’s just say that, if you own or are involved in working with a small business, it’s hardly a bad time to be doing so. In fact, the United States small business market appears to be thriving more than it has in the last decade or so – roughly since the economic recession of 2008. This is great news to hear, but what’s going on here, exactly? We’ll touch on the matter in a moment.

The Commercial Finance Group Stands With Small Businesses

At The Commercial Finance Group, we have a longstanding history and reputation of helping small business owners realize the potential of their service or product. We do this by providing them with the factoring services, asset-based loans and working capital solutions that are needed in order to business operations like building expansion, relocation, inventory procurement, hiring more staff, and other legitimate reasons. We’re proud to help these valued companies grow and provide the market with high-quality products and services that support the unique character of cities and towns around the country.

To discover more about our unique and customizable lending solutions here at The Commercial Finance Group, learn more by visiting this page or read on to see why the market for small business ventures has amassed considerable strength since the past decade.

Small Business Owners Are Reporting High Optimism Levels

According to a survey conducted by Wells Fargo referenced by Business Wire, the market’s optimism in regard to small businesses is said to have reached the highest point in the past decade. In the survey, small business owners reported considerably high optimism levels. In addition, the same small business owners also shared various insights on managing business seasonality in terms of what that means to them and how to navigate seasonality.

The Survey Says…

The findings were taken from the Wells Fargo/Gallup Small Business Index and conducted recently on July 10-14. As you can see by visiting the infographic, the United States small business economy has made a slow but steady recovery after the Great Recession from 2008-2010. The index reading started to climb since early 2011 or so, and in Q3 of 2017, the index reading jumped an impressive 11 points to a total score of 106 – quite the recovery coming from an index score of around -30 between 2009 and 2010.

An index score of 106 in July also represents an 11-point increase from April’s index score of 95. Most considerably, this index score means that it’s the highest score on record since 113 in April 2007 – over ten years ago. While this is fantastic news for investors and those involved in the small business market, how exactly did this upward trend occur? Let’s take a look.

Small Business Optimism Driven By Several Factors

With positive factors like a strong financial situation, healthy revenues, ease of obtaining credit and more hiring, these reasons came together to strengthen the economy over time:

  • Strong financial situation – Seventy-six percent of those surveyed said that their current financial situation is very good or even somewhat good, which is up a staggering 73 percent since April.
  • Healthy revenues – For the second consecutive quarter, nearly half (46 percent) of the respondents reported that their businesses’ revenue had increased over the past 12 months, up from 41 percent one year ago.
  • Ease of obtaining and securing credit – Nearly half of small businesses owners – 48 percent – reported that credit will be somewhat easy or even very ease to get over the next 12 or so months.
  • More hiring – 21 percent of those surveyed reported that the number of jobs at their company had actually increased over the past 12 months, which was up from 19 percent back in April.

Some Thoughts On The Matter From Wells Fargo

It is said that the nature of the small business market and the economy itself is largely affected by consumers and their attitude toward the success (or lack thereof) of a business, and so reporting high levels of optimism leads to a stronger, more confident market for businesses in the United States. Here’s what Mark Vitner, Managing Director and Senior Economist of Wells Fargo says about the survey and America’s current small business optimism:

“Our latest survey tells us that small business owners continue to feel confident about their current situation and are optimistic about the future,” said Vitner.

“As the economy strengthens, small business owners are reporting improvements in their day-to-day operations, particularly their sales. With their finances in better shape and fewer business owners expressing concerns about the regulatory environment, more businesses are planning to boost capital spending and hiring. It’s reassuring to see these improvements, and to see that optimism has returned to its highest level since early-2007.”

Insights On Managing Business Seasonality

Seasonal cycles naturally result in business fluctuation, and small businesses tend to experience this fluctuation more profoundly than larger, more well-established companies. In the survey, small business owners were asked about seasonal cycles that their business experiences during each year. Of those surveyed, forty-five percent reported that they have predictable times of the year that are significantly busier or slower than others.

Besides simply predicting times of a volatile business market, these business owners were also asked just how they manage their business operations during the ebb and flow of the seasons. In order to offset the slower months of the year, 62 percent of business owners said that they reduce their capital expenditures, whereas 43 percent reported that they reduce hours for their employees. Conversely, during the busier times of the year, 77 percent of small business owners said that they increase the number of hours that they personally work. More than half of the respondents increased their employee’s hours to compensate for the fluctuation in demand, and 40 percent actually hired new seasonal or part-time employees.

Small Business Challenges And Resulting Cash Flow Issues

Do seasonal differences in business volume make it more difficult to manage one’s cash flow? According to 41 percent of business owners in the survey, yes. During the slower times of the year, roughly one in five surveyed reported that they increased their use of business lines of credit or business credit card to bridge cash flow gaps.

On the other hand, during busier times, about two-third of respondents said that they pay down debt or reduce their use of credits. Naturally, at The Commercial Finance Group, we find it interesting that so many business owners turn to business credit cards to bridge cash flow gaps instead of seeking out specialized factoring and asset-based loans solutions like we offer.

The Most Important Challenges Facing Businesses

When asked about what business owners thought their most important or pressing challenges were, 13 percent responded with hiring and retaining quality staff at the top of the list. After hiring and retaining staff was attracting customers and finding new business at 12 percent, with taxes and government regulations and cash flow stability at 9 percent. Only 5 percent reported concerns and challenges with the overall economy, which was down from 10 percent in April. Overall, we’d consider that a positive sign.

In A Time Of Prosperity, CFG Can Help Finance Your Small Business!

For quality small business lending solutions from one company to another, The Commercial Finance Group is a trusted and reputable solution that’s helped countless businesses flourish. By providing a working line of capital or loans secured through invoices, you’ll receive the sufficient capital that your business needs in a fraction of the time that it takes the banks. If you’re experiencing rapid growth and you need fast working capital to finance various expansions and growth for your business, get in touch with the factoring experts today!