Maintain Cautious Optimism
In June, we found out some interesting things about the attitudes of small business owners going into the third quarter of the year. One in two, for instance, expect to do better in the third quarter than they did in the second, according to our SurePayroll Small Business Scorecard®.
For the second quarter, 24 percent said they exceeded expectations and 55 percent matched their expected results. Our optimism gauge continues to be high as well, with 73 percent of small business owners feeling optimistic about the economy in June.
This doesn’t, however, mean it’s time to throw caution to the wind. Hiring and the average paycheck is still trending flat to down.
As an accountant, make sure you’re holding your small business clients accountable to their projections. If they’ve tended to be overly optimistic in the past, you may want to caution them against overspending. Help them understand their forecasting and make sure it’s realistic.
Entrepreneurs are optimistic about the future by nature, but there’s still a lot of uncertainty lingering around the economy. Our survey respondents listed improved growth nationwide, a better understanding of health care reform, tax cuts and a rising housing market as factors in making them more confident to hire.
Some of your clients may have a bright outlook, which is a good thing in the long run for the economy. Small business optimism usually turns into action (i.e., hiring). But you don’t want to let that outlook compromise their cash flow.
Michael Alter, payroll expert with an MBA from Harvard Business School, is a nationally recognized spokesperson providing thought-leadership and sensible advice to help accounting and payroll professionals build deeper more profitable relationships with clients. Alter, President of SurePayroll, writes the Trade Secrets column on INC.com and is frequently published in Bloomberg TV, the Wall Street Journal, and Entrepreneur Magazine.