U.S. businesses are optimistic, but that doesn’t mean entrepreneurs aren’t facing increasingly challenging hurdles. The latest data from ADP and other analysts signals a slowdown in job growth across the board, including among small companies, which may be forcing existing employees to be working more hours. Plus, new data reveals that entrepreneurs are concerned they may be overpaying on their taxes, giving rise to broader worries that small and medium-sized (SMBs) don’t have adequate control over their finances.
Despite persistent confidence, particularly for international exporting companies, businesses say the American Dream is growing further out of reach. Below, the numbers offer a picture of small businesses in the U.S. today.
Last month, 21,000 jobs were added by small businesses, according to new ADP statistics, a significant decline from the 59,000 SMBs added in July. Analysts noted that the figure is also less than the monthly average for the first seven months of the year: 49,000. Shrinking unemployment is putting a squeeze on corporates of all sizes that are looking to expand their staff levels, ADP said, noting that average monthly job gains for 2017 were 61,000, significantly higher than this year’s trends.
In August, 2.29 percent more jobs were added at small firms, according to CBIZ‘s Small Business Employment Index. The report offers a conflicting view on small business hiring last month compared to ADP’s statistics: CBIZ data revealed a 2.29 percent hiring increase in August, compared to a 2.03 percent hiring decline in July.
Last month, a 0.73 percent Small Business Jobs Index decline suggests fewer jobs were added by small businesses compared to August 2017, Paychex and IHS found in their latest Small Business Employment Watch. The data shows SMB hiring has slowed for three consecutive months, during which the Index dropped 0.38 percent. According to Paychex data, the Professional and Business Services industry is the only sector that saw accelerated job growth last month. Analysts pointed to the tight labor market as the culprit behind slowed job growth, which may be attributing to the increase in weekly hours worked by small business employees, the report said.
Seventy percent of entrepreneurs feel the ‘American Dream’ is further from reach, a survey from OnePoll and Lendio said. Nearly two-thirds of small firms surveyed said the ability to overcome certain barriers means success is still possible, but more than one third said the challenges of owning and running their own business is significantly harder than it was in the past. Researchers found economic challenges, employee hiring and general financial management as the toughest challenges for small business owners today. While achieving the American Dream may feel more out of reach than ever, some professionals may be changing the definition of success. Nearly a quarter of respondents said having an education and a job means success has already been achieved.
Thirty-nine percent of SMBs are cautiously approaching global trade in response to trade agreements, according to a new survey from American Express. Despite trade disputes, policy uncertainty and political instability, researchers found U.S. small businesses that export across borders are generally optimistic about their futures. More than three quarters said they expect growth in the next five years, Amex noted, adding that SMBs increasingly see global exports and trade as key components of their business growth strategies.
Thirty percent of SMBs believe they pay too much on their taxes, while 13 percent aren’t sure whether they’re overpaying, according to Clutch‘s 2018 Small Business Accounting Survey. Researchers noted contradictory beliefs among SMB owners: While a significant portion aren’t sure about their tax payments and nearly one third say they pay too much, 95 percent say they are confident about the accuracy of financial records. According to Clutch, “small businesses often fail to manage their finances until it’s too late.”