Ask small-business owners about their election-year concerns and the future of the economy is at the top of their list. Roughly a third of respondents to the 2016 American Express OPEN Small Business Monitor survey said the economy was the issue that would most influence their vote. The other top concerns—candidates' stances on tax policy and health care—were each named as the deciding factor by only 16 percent of business owners.
That big-picture thinking applies to their own operations as well. Business owners are planning ahead, and they're generally optimistic about their companies' futures: In the 2016 Small Business Monitor, 64 percent have a positive outlook and 75 percent plan to grow their businesses. To do so successfully, they're prioritizing fundamentals like personnel and processes.
Whatever the outcome of this year's elections, keep these items in mind to help keep your business strong long after the polls have closed this November.
1. Hire the right people.
Business owners are busier than ever and are considering hiring more staff to help handle the load. Nearly four in 10 business owners plan to hire staff over the next six months (39 percent, up from 34 percent last spring) and the lowest number since 2007 say they will not hire or cut back (30 percent).
Most agree that hiring is the key to success. “You're only as good as your people" was the top-chosen “mantra" (26 percent) of most small-business owners in the Small Business Monitor, and finding the right staff was the most common obstacle to future growth, with 19 percent of owners naming it their biggest challenge.
If you’re thinking about hiring new employees, plan ahead so you can more easily find the right candidates when you're ready for them. Look at your goals for the next six to 12 months and think about what personnel you'll need to achieve those plans: What kind of skills will you need? Where will the employee fit into your organization? Browse online hiring sites and ask your peers for their recommendations on where to find great candidates, even well in advance of officially launching your search. Having a clear definition for this new employee's responsibilities will help you better target your search when the time comes.
Also, talk to your employees about how their roles might shift or change with the addition of a new person—for example, maybe some would focus more on management or sales, while the new person would take on some of their old duties.
2. Seize the moment to make smart investments.
Many business owners think of financing as something that can help them after a need arises or when an emergency hits, but financing can be a powerful tool to strengthen your company before you need it. These days, small-business owners are less worried about their cash flow—45 percent of respondents had cash flow concerns in 2015, compared to 36 percent this year. Meanwhile, more than 80 percent were confident that they could access financing if they chose to do so. Taking advantage of this strong position could set the stage for future growth and security.
Focus on the investments you can make now that will expand your capabilities. About four in 10 respondents (39 percent) are planning on technology investments over the next six months, such as computer systems and software. Ask yourself what technology upgrades would help your business operate more efficiently or help you serve more customers. Confer with your employees or partners about what types of new equipment, real estate or other improvements would help them do their jobs more effectively or boost your company's offerings. Now might also be a good time to check in with customers about what other needs you could be meeting, or to think about expanding your customer base where it makes sense to do so.
Be sure to thoroughly research the cost of potential investments and what return you can expect from them. If you do decide to tap available capital, potential lenders will want to see those numbers.
3. Plan for the next phase of your business.
Business owners are looking to their own financial futures as well and are particularly vigilant about their retirement savings. More owners are worried about their ability to retire successfully, with 53 percent naming it a concern, up from 47 percent in last year's Small Business Monitor.
Ensuring a comfortable retirement can take a big commitment: 26 percent of entrepreneurs think they need to save between $1 million and $2 million to retire comfortably, up from 19 percent last year. Another quarter of respondents think they'll need at least $750,000.
Now may be the time to consider how much money you'll need to retire comfortably and begin to develop your succession plans. If selling your business is part of the picture, that often entails years of planning. Do some research about how sales are typically structured for a business like yours. In many cases, you would be expected to continue in an advisory role for several years after a new owner takes over your company.
To attract the right buyer, you also need to make your business as appealing as possible. Keep potential buyers in mind as you look at your own growth plans and profitability, so when the time comes, you'll be able to make a good case for why your business is worth what you're asking for it.
A news release outlining the results of the survey is available here.
Photo: Christopher Lane
American Express OPEN Small Business Monitor, conducted since 2002, is based on a nationally representative sample of 739 U.S. small business owners/managers of companies with fewer than 100 employees. The anonymous survey was conducted via telephone by Ebiquity March 1-21, 2016. The poll has a margin of error of +/- 3.6% at the 95% level of confidence.