"There's a lot of fear and uncertainty with small business," said Jeff Stibel, vice chairman of Dun & Bradstreet, which along with Pepperdine University releases a quarterly reading on small- and medium-sized companies. "The noise around what's happening globally and in China is giving people enough uncertainty to create some pause," Stibel said.
For larger businesses, uncertainty can mean layoffs to immediately cut costs and boost confidence. But for smaller businesses, even micro businesses with only a few staffers running an enterprise, strategic decisions are trickier. "With small business, if you only have one or two employees, you can't lay off 50 or 100 percent of your staff," Stibel said. "You have to find some other way to survive."
Stibel added that worried business owners might start asking questions like, "Maybe I need a home equity loan?" "Maybe I have to start selling some stock?"
According to a December index reading from the National Federation of Independent Business, plans to create new jobs actually posted a 4 point gain and reflected optimism about sales. The report said job creation plans were especially strong in manufacturing, a sector that has been slowing.
Capital spending among small businesses also grew stronger in November and December, reflecting rising certainty. "The percent of owners planning capital outlays in the next three to six months rose 1 point to 26 percent, not a strong reading historically but among the best in this expansion," NFIB Chief Economist Bill Dunkelberg said in a statement.