Sixty-one percent of those surveyed said the lack of skilled employees is an impediment to growth.
study examining impediments to growth in the small-business sector reveals that
72 percent of small-business owners would like to expand by adding employees
within the next five years, but various impediments are standing in their way.
According to Growth and External Factors, a report prepared by the National
Federation of Independent Business (NFIB) Research Foundation, uncertainty and
weak sales are the two primary impediments to small-business growth.
study found that business uncertainty and weak sales are limiting the ability
of many owners to expand. While economic concerns rank high in the minds of
owners, a large number of small businesses also report that uncertainty is a
significant factor in making business decisions. The single most important
indicator that would renew small-business owner confidence in business
conditions is increased sales in their businesses. This is a fact supported by
NFIB's Small-Business Optimism Index report, which has identified poor sales as
the top business concern for small firms for 16 quarters running.
is no question that small businesses are responsible for a significant portion
of the job creation in our economy," said William Dennis, report author and
senior fellow at the NFIB Research Foundation. "Their growth and success is
often contingent upon a litany factors beyond their control but within the
purview of policy-makers in Washington. Impediments to growth may not be easily
overcome, but if we are ever to bridge the gap between desired and actual growth,
government officials must look at the problems small businesses face.
Understanding the challenges should help with the formulation of policies that
would help them to thrive."
is a growth impediment impacting 61 percent of small employers; only 25 percent
say uncertainty does not impact them. However, owners of the smallest firms and
owners of the young firms were more likely to identify uncertainty as a concern
than owners of larger small firms and more established firms. And while the majority
of small employers who believe that uncertainty is a hurdle think of it as
economic in nature (83 percent), a comparatively large number term their
uncertainty as related to political questions. More than half (51 percent) who
think uncertainty is an impediment to growth (38 percent of the small-employer
population) blame the current political situation at least in part as
obstructing their growth.
the adverse impact of regulation is often challenging to identify, 40 percent
of small employers say that regulatory or legal issues are an impediment to
growth. The complex labyrinth of regulations as opposed to a specific
regulation or set of regulations was more often cited as an obstacle, with 63
percent of this group (31 percent of the population) reporting that a current
investment or project was impacted by a regulatory matter. One-quarter of those
who find regulations to be a burden either cancelled a project scheduled for
the next six months or abandoned investment and/or project plans.
percent reported the lack of finance as an impediment to growth, and 19 percent
ranked it a serious matter. Though 15 percent of small employers asserted that
the lack of finance was their biggest obstacle to growth, 49 percent termed it
a minor or no obstacle. More than half (53 percent) of small firm owners
surveyed think that internally generated cash flows will be their most
important source of financing desired investment over the next five years. Bank
loans will be the second most common source. However, 33 percent of those
identifying lack of finance as an impediment to growth say that existing
financial obligations are "seriously constraining" their ability to finance
desired business investment and another 44 percent say that it is constraining.
the unemployment rate near 10 percent, finding skilled workers is still a
struggle for small-businesses. Sixty-one percent of those surveyed (24
percent of the total population) said the lack of skilled employees is an
impediment to growth and indicated that they would hire at least one additional
employee at the current market wage rate in the next six months if they could
find people with appropriate skills. Over 37 percent (9 percent of the
population) would employ more than one.
15 percent of small-business owners cite the lack of a strong management or
advisory team as an impediment to growth. Of the group currently possessing a
management team, 47 percent are highly confident their current team can provide
the necessary assistance to reach the firm's growth objectives in the next five
years. Most citing this impediment want to add management employees rather than
to change the ones they have.