The Great Recession ended in July 2009. In our online poll since then we’ve asked small business owners several times about their economy.
Comparing responses from our poll at the end of 2011 with the one at the end of 2013, the groups experiencing sales growth went from 76% in 2011 to 48% in 2013, while the bottom half went from less than one-fourth having a tough time in 2011, to more than half reporting flat to negative sales in 2013. Small business reality has been steadily going in the wrong direction.
We’ve also asked about small business projections for the coming year. In 2012, 73% were positive about the New Year, while the rest were uncertain. But one year later, in 2013, the responses essentially inverted: 24% positive, and 76% not so much. Recently we asked, “How are you projecting sales for 2014?” Only 20% are projecting a good year, with the other 80% projecting slight to flat to negative growth.
As you can see, not only has actual business performance declined for our small business respondents, but optimism about the future is also going in the wrong direction, from 73% positive in 2012, to 24% positive in 2013, to 20% positive in 2014.
For more than a decade on my radio program, I’ve reported monthly on two scientific small business surveys: Dr. Bill Dunkleberg’s NFIB Small Business Economic Trends Report (the 40-year gold standard), and the Tatum Index of Business Conditions. In terms of context, my “trends and conditions” poll responses have consistently aligned with the results of these two during the same periods.
Here’s why all of this matters: Almost five years into a recovery, the economy should be growing at 4%, but is barely reaching 2%. And in December, economists expected 200,000 new jobs, but were shocked when only 74,000 were created.
The small business sector produces over half of the U.S. economy and most of the net new jobs. If you’re wondering what happened to the missing 2% GDP and millions of new jobs, they’re lost in the production small businesses have not created since 2009.
When we’ve asked about the single greatest thing holding small businesses back since 2009, the answer has been consistently and overwhelmingly “uncertainty” created by anti-business attitudes and policies coming out of Washington, like Obamacare and proposing a minimum wage increase.
Small business owners are pathological optimists. But Washington has taken a toll on their reality and expectations—and by extension, the economy.
Write this on a rock … In the 21st century, as small business goes, so goes America.
Jim Blasingame is one of the world's leading experts on small business and entrepreneurship. He is the creator and award-winning host of the nationally syndicated radio program, The Small Business Advocate® Show. In addition to his weekly columns, Jim is the author of two books; Small Business is like a Bunch of Bananas and Three Minutes to Success.