How old man winter took its toll on Main Street businesses

The numbers are filtering in and Boston-area small businesses have lost an average of 24 percent in sales this winter, according to recent data. But some on Main Street already are looking to make up losses and feeling optimistic about the economy.

Between Jan. 26 and Feb. 22, when Boston was hit with record levels of snowfall, small businesses in the region lost an average of a quarter of sales, according to a weather sales survey of 1,600 businesses. The data were released last week and the research was conducted by several groups including the Retailers Association of Massachusetts. The survey also found a 7 percent decline in payroll among smaller employers.

"The results exhibited our worst fears ..." -Jon Hurst, Retailers Association of Massachusetts

Hardest hit in Boston were retail shops and restaurants with average sales losses of 49 percent, and a 14 percent drop in payroll costs.

"The results exhibited our worst fears that small businesses have suffered devastating sales losses due to the unprecedented winter weather," said Jon Hurst, president of the Retailers Association of Massachusetts, in a prepared statement.

"We are urging policymakers to take a hard look at rules and regulations and laws that impose costs on small businesses and make accommodations to help our Main Street businesses resume their economic recovery," said Bill Vernon, Massachusetts state director of the National Federal of Independent Business in a statement.

Vernon noted business owners offered specific suggestions for relief including a sales tax holiday, a payroll tax holiday, delayed tax filings and low interest loans for small-business owners.

Small business confidence ticks higher

A man trying to ride his bicycle in Boston last month.
Bill Greene | The Boston Globe | Getty Images
A man trying to ride his bicycle in Boston last month.

In a separate report released earlier Tuesday, small-business optimism edged up. But if the winter wasn't so severe, the mood on Main Street might have been higher.

After strong gains in November and December, the National Federation of Independent Business optimism indicator gained 0.1 point to 98 in February, the third-highest reading since early 2007.

The survey of 716 small-business owners found 29 percent could not fill open positions, the highest level since April 2006. Fourteen percent of them cited the shortage of skilled labor as their top problem, the highest since September 2007.

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NFIB Chief Economist William Dunkelberg said the poor weather had a major impact on optimism, especially for those in the Northeast. "It's a huge hit, and it doesn't make businesses or consumers very happy," Dunkelberg said.

Despite the winter blues, there may be a silver lining for smaller businesses.

Retailers with $5 million or less in annual revenue had a better 2014, meaning they may have more cushion for sales pressures including those related to the weather. That's according to Sageworks, a financial analytics company.

"The Sageworks data shows that privately held companies have successfully improved their financial standing over the past few years," said Sageworks analyst Libby Bierman in an email message to CNBC. "Even better news for these businesses were their related increases in profitability. In 2014, the average small, private company was making almost 10 cents on every dollar—a significant improvement over the 3 or 4 cents they were making as recently as 2011."

Looking ahead, NFIB's February data showed more businesses are anticipating better job numbers and a lower unemployment rate in the overall economy. About 26 percent also said they plan to make capital outlays.

"The good news is the indicators, especially those related to generation of GDP and jobs, saw a nice bump," NFIB's Dunkelberg said. "Those kinds of things suggest fundamentally that businesses will see the future in a better light or they wouldn't be putting their money out on the table, they expect to see a payoff."

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