Barometer surveys find small business owners are upbeat
Tight labor market also is contributing to wage increases for good workers.
The state’s small businesses are going strong, according to the Small Business Association of Michigan Barometer surveys of 2015.
SBAM’s Barometer surveys have been happening in some form since 1994, said Michael Rogers, vice president of communication. SBAM usually conducts the survey about twice a year — once in late spring and once in late fall — sending the survey to its members and other small businesses through Troy-based Phoenix Innovate.
He said the response rate usually covers between 500 and 1,000 Michigan small business executives and owners.
A contrast-and-compare of the two surveys that were done in 2015 doesn’t show much difference — except for growth. For the first survey of 2015, SBAM surveyed nearly 900 small business owners in spring 2015. Here are the main findings of that survey, which came out in July. The survey stated that over the previous six months:
- 49 percent of small business owners said sales had increased (the same level as six months ago.)
- 32 percent said profits had increased (down from 35 percent.
- 30 percent said they hired more workers (up from 29 percent.)
Looking forward over the next six months, the survey found:
- 61 percent of small business owners said they expected sales to increase, up from 61 percent six months ago.
- 56 percent said they expected profits to increase, up from 50 percent.
- 37 percent intend to hire more workers, up from 33 percent.
Now look at the numbers from the second 2015 survey, which was performed in November and came out earlier this month. This survey, which was completed by 755 small business representatives, stated that in the last six months:
- 50 percent of small business owners said sales had increased (up from 49 percent six months ago.)
- 37 percent said profits had increased (up from 32 percent.)
- 32 percent said they hired more workers (up from 30 percent.)
The fall survey also asked participants to look ahead six months, with findings that included:
- 63 percent said they expect sales to increase (down from 66 percent six months ago.)
- 54 percent said they expect profits to increase (down from 56 percent.)
- 40 percent intend to hire more workers (up from 37 percent.)
The upward trends revealed in the second survey indicate good things for Michigan’s small business, Rogers said. The success is across small business industries, and the trends don’t lurch up and down, but show a slow progression, he said.
“Nothing in this one surprised us because of the continued trends of recent years, and the trends show a steady increase in sales and profits and such. Sales going up fits the trend of recent years and what we know anecdotally — that the small business market is moving along and in decent shape,” he said.
“Eventually, we know the economy is going to take a downturn, but we’ll see it. Unless, of course, it’s like 2008.”
Part of the current success of small businesses is the way business leaders chose to respond to years like 2008, in particular, Rogers said.
“We’re hearing from our members, a lot of them, if they survived the Great Recession in 2008 and 2010, they made themselves leaner and more efficient,” he said. “They put themselves in a spot where, if the economy improved, they could hire more workers.”
The main small business challenge Rogers sees coming is the “general theme of the tight job market,” a trend he’s seen in the last number of surveys.
“Small business owners have been telling us that, in today’s tight job market, it’s very costly and time consuming to have to replace a worker, so they are boosting wages and salaries to help keep the good employees they already have,” he said.
“It’s not just limited to things like computer programmers and developers. It’s going across all borders. It’s just really hard to get good, qualified people. It’s hard for someone to come in and really help small business grow.”
In a number of ways, however, the challenge of a tight job market can lead to more opportunities for talent, Rogers said. There’s now more room for someone who wants to help a business thrive because they’re committed to the business’s mission. In a small business, that kind of talent can report directly to the owner and be able to have a larger impact on the whole enterprise from the ground floor up, he said.
The tight job market also can lead to increased wages — a trend history has proven true, in Rogers’ experience.
“The big one was the continued trend, in that the job market is very tight. I’ve been working on the Barometer survey since 1996 and I can remember having this in the late 1990s, with businesses having a difficult time getting workers. They finally fixed that by boosting wages,” he said.
“This survey finally shows some movement in that — that small businesses are saying they’re being forced to increase wages, not necessarily for new workers but for current workers.”