Small Business

A Happy New Year: Business Owners Optimistic As 2012 Begins

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Business owners were uncharacteristically upbeat in December, and are looking forward to growth in 2012.

Poll results from the December Small Business Authority Market Sentiment Survey, released today, reveal that independent business owners are optimistic as they begin the first quarter of 2012.

“We were surprised at the level of optimism that existed at the end of December,” said Barry Sloane, president and CEO of The Small Business Authority. “It was probably a result of more spending during the Christmas season than originally anticipated.” In addition, small gains in hiring in the fourth quarter and the drop in the unemployment rate, he said, contributed to a feeling that the economy might be turning a corner.

The survey, which polled 1,000 respondents during the first three weeks of December found that 55 percent of small business owners were optimistic going into 2012, and 64 percent were optimistic regarding their 2011 year-end results. While 20 percent were downright pessimistic, a full 25 percent were neutral, showing that there is still some caution as they begin the new year.

However, the small majority of business owners that are feeling good heading into 2012 could spur a cycle of growth.

“There’s no question, as business owners become more optimistic, it will help propel the economy in a forward direction. They will tend to hire more, invest more in their business, and seek to grow.”

Pent up demand might also propel spending into the first quarter. “As businesses deplete resources and supplies, they have to reinvest. That’s why we have business cycles. But the optimism coming out of the fourth quarter should lead to a decent first quarter as well.”

Indeed, 68 percent of respondents said that going forward, it would be easier to grow sales, than reduce costs, compared to 32 percent who said it would be easier to reduce costs.

Sloane had some caveats, however.

“If the situation in Iran escalates, if we get a spike in oil prices due to Iran situation, if consumer spending retreats in first quarter — any of those things could could put a stop on any movement forward,” he said.

Despite the unknowns, Sloane said, “It is potentially very good news for business going into 2012. This optimism is an extremely important component of a stronger economy.”