Small-Business Hiring Halted by Economic Concerns: Manta
Small-business owners were planning to hire at this time last year, but the majority (80 percent) havent hired a single employee in the first three months of 2012, according to the latest Manta SMB Wellness Index, which also found new business activity fell 30 percent in the first quarter of 2012, compared with the same time last year. The index looks at multiple business resources nationwide and takes the pulse of small business owners on current trends.
In addition, the survey found that more than half of small businesses (53 percent) say they are not taking advantage of the Patient Protection and Affordable Care Act health care tax credit, which became available in 2010 for small businesses with fewer than 25 full-time employees. In fact, education may be needed in the business community as one in three dont understand it, the survey indicated.
Rising gas prices may be having a disproportionate impact on small businesses and creating the decrease in business activity. More than four-fifths of respondents (82 percent) say gas prices will negatively impact their business if they continue to rise; 43 percent say gas prices have eaten into profits, 20 percent say they had to raise prices to cover those costs, and 11 percent say gas prices impacted their ability to grow and hire.
Mantas survey also found nearly 60 percent of small businesses say access to credit and loans has been worse in 2012, compared with last year. Finally, nearly one-third say they owed more in taxes this year. Forty-five percent of small businesses do not plan to hire more people this year than they did last year, but one-third say its too early to tell. Additionally, 42 percent feel the economy is not in recovery and 21 percent arent sure. When it comes to taxes, more than four in 10 small-business owners say they are more complicated for their company this year, compared with previous years. Thirty-one percent say they owed more in taxes this year than last year.
The index also shows that while new business activity is down year-over-year, the fourth quarter of 2011 decreased even more39 percentcompared with the same time in 2010. While activity is down, small-business owners arent letting factors they cant control, like the unstable economy or the presidential election, stand in the way of building their business in new ways, said Pamela Springer, president and CEO of Manta.
Small businesses are the lifeblood of the U.S. economy, and so far, 2012 has shown mixed results in terms of a rebound. As a result, small businesses are forced to grow in new ways, Springer said. By leveraging innovative online tools, SMBs are able to springboard their business across industries through referrals, connections and discussions with a community of their peers to help them focus on increasing their online presence and best practices for success.
The findings are part of the Manta SMB Wellness Index, which is a quarterly index on the state of small business released by Manta, an online community dedicated entirely to small business. Mantas latest survey was based on a poll of more than 1,100 small-business owners about their opinions on the 2012 small-business landscape and issues affecting their business like health care changes, access to credit and gas prices.