Finding workers, recession are top worries for small businesses
BY NANCY DAHLBERG
Small business owners, what keeps you up at night? If it is finding workers or managing your debt, you’re not alone.
Finding qualified workers to fill open positions continues to be the top worry of Florida’s small businesses, according to a Florida Chamber of Commerce 2019 Third Quarter Small Business Index survey.
“Florida’s small businesses continue to be concerned about being able to hire a talented workforce,” said Jerry Parrish, chief economist and director of research at the Florida Chamber Foundation, who added that improving workforce quality was part of the state’s strategic plan for the next 10 years. “Improving Florida’s talent pipeline for a better workforce will help ensure jobs have talented employees and will help put workers on the path to prosperity.”
The No. 2 worry was the possibility of a recession. Debt may also be keeping small business owners up at night. In the chamber survey, about as many businesses surveyed believed it would be harder to get financing in the next six months as those who thought it would be easier.
About a quarter of those who tried to get financing in the last six months could not, the survey said.
The concerns of small businesses are of key importance in a state where 92 percent of all its businesses have fewer than 20 employees, Parrish said during a panel discussion of state leaders, including Michael Myhre, CEO of Florida SBDC Network. The panel discussion was conducted at the Small Business Leadership Conference held in Orlando over the summer. The annual conference is presented by the Jim Moran Institute for Global Entrepreneurship and the Florida SBDC Network. At the rate Florida has been growing, at about 1,000 businesses a day, 3 million more small businesses will be created by 2030, Parish said. The state has 2.5 million small businesses and is No. 2 after Vermont for the percentage of business ownership in the population: 21 percent.
Other concerns in the latest Florida survey include growth management, government relations and healthcare costs.
Yet, despite those concerns, 50 percent of respondents are booking higher sales now than the same time last year, and 65 percent expect to have higher sales this year than last. That’s up from 62 percent last year.
Also, 39 percent plan to hire in the next six months, down from 44 percent a year ago, and 41 percent plan to invest in equipment or technology.
Meanwhile, a recently released national survey of small businesses showed Florida’s entrepreneurs were not alone in their concerns and outlooks.
The annual Small Business Credit Survey conducted by 12 Federal Reserve Banks shows that 70 percent of small firms have outstanding debt. As many as 64 percent of small businesses reported struggling financially, with operating expenses being the No. 1 problem (40 percent), followed by credit availability (31 percent) and making payments on debt (29 percent).
In order to address those financial issues, 69 percent of small businesses used personal funds, 45 percent took out additional credit, 32 percent cut staff, hours, and/or downsized operations, while 28 percent made a late payment or failed to make a payment altogether.
Still, 35 percent of businesses in the national survey reported higher revenue growth, and 33 percent hired workers to their payrolls in the last year, the survey showed.
According to Frank Fink, business consultant with the Florida SBDC at IRSC, one proven tool used to convert worry and concern into positive actions is for the business owner to create and develop business specific Key Performance Indicators (KPIs) for the operation. Tracking business operations through disciplined review of KPIs removes the guesswork in evaluating business expenses, revenues and debt.
“Regularly reviewing and tracking relevant KPIs can help a business owner measure progress, assist in creating strategic initiatives and improve the decision making process,” said Fink. “Also, reviewing and understanding leading and lagging indicators can assist a business owner in understating and exploiting market trends in an effort to potentially expand sales.”
The Florida SBDC at IRSC can assist a business owner with developing business specific KPIs to improve business performance and profitability and simplify tracking and evaluating progress. For more information regarding the Florida SBDC at IRSC and its no-cost business assistance programs, contact Katie Muldoon at 772-336-6285 or [email protected]
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