2013 Small Business Forecast: Bad News and Good News

Small-business owners, in record numbers, are not optimistic about what's ahead in 2013.
Freelance Writer and editor, Self-employed
December 28, 2012

The dawn of a new year usually comes with a healthy dose of optimism. Unfortunately, 2013 isn’t fitting into the norm. Small-business owners are reporting negative thoughts mingling with good ones around heated topics such as the fiscal cliff, healthcare and immigration.

Uncertainty Prevails

On Dec. 11, the National Association of Independent Businesses released its November Small Business Optimism Index with startling numbers. The index had dropped 5.6 points, one of the largest drops since the survey began in 1943. 

“From month to month, we usually see a change of .2 or .4 points; I can’t remember a time when I’ve seen optimism drop this much,” says Jean Card, vice president of media and communications for NFIB.

The fiscal cliff is the primary reason for low numbers, says Card, noting that small-business owners are wary of tax increases in the coming year.

“The lack of certainty in knowing what their taxes are going to look like next year is scary for small-business owners,” says Molly Brogan, spokesperson for the National Small Business Association. “They are holding back and pausing on growth to wait and see what will happen.”

Healthcare reform is another big issue for small-business owners. As Brogan explains, the NSBA worries that the healthcare reform bill will cause insurance companies to ask for more money from small businesses—but she isn’t sure how much.

“It is another uncertainty issue,” she says.  

Jim Howser is co-owner of Hawthorne Auto Clinic in Portland, Ore. In February, he will celebrate 30 years in business and says his biggest concern isn’t healthcare or the fiscal cliff—it’s the possibility of a reduction in Medicare, Medicaid and Social Security benefits, as well as a pushback in the retirement age. 

He has 12 employees, several over 50 who have undergone serious surgeries. 

“I can’t provide retirement benefits for 12 employees and it would be devastating to push the retirement age up to 70 or higher,” he says. “People in my industry just can’t work that long. I wish government would stop fussing with the basic safety net under the middle class.” 

Silver Linings

There is a silver lining for small-business owners heading into 2013. As Brogan explains, the Small Business Lending Enhancement Act is on the table and supported by both parties. If passed, it would increase business lending access at credit unions to 27.5 percent of a bank’s total assets, up from 12.25 percent.

“We did an access to capital survey last year and found that a lot of small-business owners are relying more on community banks,” she says. “This would be a really positive piece of legislation that would get more capital in the hands of small businesses.”

Potential changes in immigration laws are another shining light for entrepreneurs. Lawmakers are discussing the issue of extending visas to immigrants active in the fields of science, technology, engineering and mathematics (STEM), says Brogan.

“There is bipartisan legislation in the House and Senate talking about STEM and people are hopeful about it,” she says. “There won’t be a vote until next year but it is our hope that if an immigrant is getting a U.S. education in one of those fields, there will be a way to help them stay and work here.”

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