Many of you recently celebrated ringing in the New Year. Some of you did it by going out on the town, others by getting in their pajamas and curling up on the couch with a glass of your beverage of choice. It's a time for new resolutions, new loves, new babies, engagements, lifestyle changes, and getting a fresh start.
For accountants and small business owners, the celebration may be around a renewed focus on growth in 2014. According to our December 2013 SurePayroll Small Business Scorecard®, optimism is on the rise among small business owners, with 70 percent of them feeling optimistic about the future, compared to only 55 percent at this time last year.
Why the turnaround? Especially after a year of uncertainty surrounding the government shutdown, health care reform, and an economy still in recovery?
Part of it was that nearly half of the small businesses we surveyed did better than expected in the fourth quarter of 2013, with three out of four doing the same or better than a year ago. Looking forward to the first quarter of the new year, only 12 percent see a drop off in business coming.
Another part of the story is that 75 percent of small business owners said they will not hire as many 1099s, or independent contractors, as they did in 2013. This could mean they're shifting their focus towards making full-time hires.
A pickup in hiring would mean more stability in the small business economy, and more people with money to spend on Main Street. This year we saw mainly recovery, with hiring down 1.7 percent and the average paycheck down 0.3 percent. Not great news, but what small businesses were able to do was cut costs, improve productivity, and strengthen balance sheets, even without hiring.
Let's hope when we turn the page on 2014, we'll be celebrating a small business economy that's going full steam ahead.