While a recent small business optimism index ticked up slightly, a look between the lines shows small business woes are emerging and creating a ripple effect on expansion plans and new hires. Rising health-care costs, the minimum wage debate and even more red tape are dampening entrepreneurs' outlook and ability to create jobs.

Few small businesses think now is the time to expand, and hiring was essentially flat for the 11^th straight month, according to this week's release of the August small business optimism index from the National Federation of Independent Business. The report suggests even weaker job creation ahead.

William Dunkelberg, NFIB's chief economist, says it's simple. Business owners don't think things will be getting better anytime soon.

"The business environment is not favorable," Dunkelberg said. "Six months from now, more business owners think things will be worse off than those who think things will be better."

The flat small business data mirrored Friday's disappointing report from the Labor Department that showed 142,000 new jobs in August. That ended a six-month streak of 200,000-plus jobs created. The bottom line is key issues including rising health-care costs have created a big overhang on small to mid-sized employers, who are peering into the economic horizon and see few reasons for optimism.