As Economy Grows, Small Business Leaders Face Needs For Financing, Technology, Trained Talent

With years of regulatory restraint seemingly behind them, small business owners are focusing on growth in 2018.

Surveys from diverse sources including the National Chamber of Commerce show small business owners believing that not only are they confident about their own prospect, business sectors, geographic region but also the national economy.

This confidence is reflected in small businesses hiring, investment in property, plant, and equipment as well as borrowings, say most recent surveys.

Small businesses appear to have started 2018 with a healthy sense of confidence, a sentiment reinforced by projections of 3% global economic growth for this year.

However, the optimism remains tempered by a few factors – among them, the perennial cash management, talent shortages, and the disruption caused by emerging technologies plus for some the continuation of geopolitical and social tensions.

While the new tax bill put additional dollars into small business coffers, there are as always many demands for each dollar including but not limited to upgrading assets such as technology, equipment, property, plus compensating workforce and growth cash outlays before payments.

Finding the dollars to finance investment in growth factors remains a major concern of small business leaders according to almost all surveys conducted this year and reported in the press.

To cope with worker and skill shortages down the road, survey results tell us that small businesses are fundamentally rethinking the composition of their future workforces.  In one survey, nearly 80% of small business owners and leaders foresee greater use of contingent non-traditional employees.  Moreover, three-quarters of them anticipate a rise in digital labor solutions such as robotic process automation.

A desire to have cultures that are inclusive, engaged, high-performance, customer-focused, and resilient is signaled throughout the responses to this year’s survey.

At the same time, the impact of the New Digital Economy is clearly being felt in the daily processes and practices of businesses, and through the emergence of new competitors; owners and leaders want to foster a culture of innovation that encourages cooperation across functions and business units and promotes risk taking in order to stay ahead or abreast of the marketplace.

Another concern of owners and leaders is creating new business models because of disruptive technologies.  For instance, less than half of owners and leaders (48%) see their firms as a technology leader in their industries.  Moreover, less than 10% of owners and leaders say they are extremely satisfied with their organization’s ability to innovate, and they continue to struggle with how to measure innovation.

The latest job numbers show three contrasting trends: more people working, salary growth slowing, and the need for better trained employees.  While the number of people working has increased, salaries have not moved upward as fast as economist predicted and small businesses report many applicants lack fundamental skills to succeed.

These are the challenges facing small business owners and leaders as they seek to participate in the economy’s growth.

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