Recession Hangover for Small Businesses - Is Self-Limiting Thinking Holding Your Small Business Back?
This is one of the findings of Bank of America's recently published Spring 2015 Small Business Owner Report. This report, which is conducted semi-annually by Bank of America, is based on responses from 1,000 small business owners across the country.
Digging deeper into the survey results, only one in five small business owners (or 21 percent) say that their companies have completely recovered from the negative effects of the Great Recession. Still, about half of small business owners (or 48 percent) express confidence that the national economy will improve in the near term. This is up markedly from a year ago, when just 40 percent of small business owners expressed such confidence.
Pursue Growth and Build Your Brand
Evelyn Hsu, CPA, CIA, partner at Ivy Accounting Tax & Advisory LLC in Miami, Fla., sees a glass half-full in these statistics. "Even though some small business owners are still trying to recover from the recession, they should not be too far from where they were back in 2008," she says. "Large majorities anticipate investing in head count, new products and services, capital improvements, and new domestic markets."
Jason Feist, the managing partner of Empowered Insights, an accounting advisory firm in Cincinnati, Ohio, believes strongly that small businesses should be pursuing growth opportunities and building their brands in the current economic environment. "The opportunities in the market are endless," Feist says. "Whatever you put your mind to, you can create."
Hsu echoes Feist's thoughts about growth: "Small business owners should be implementing growth strategies in the current environment," she says. "Many of these companies are in better financial shape today than they've been in for a long time. Having implemented cost-cutting and austerity programs during the recession, they have relatively healthy balance sheets and sizable reserves of working capital."
According to Feist, many small businesses don't reach their full potential because owners fall victim to self-limiting thinking. "Often, they convince themselves of false thoughts that something is bad or that they can't do something due to fill-in-the-blank. For example, they think, 'Good clients are hard to find because the economy is bad.'
"However, this is a false view," Feist continues. "In both good times and bad, there are more clients out there looking for great professionals and businesses to work with than any small business owner could ever serve. Our business has grown consistently year after year, no matter what the economic conditions have been."
Entrepreneurs Are Willing to Sacrifice
One encouraging result of the Bank of America survey is that about two-thirds of small business owners (67 percent) say they are or would be willing to make personal sacrifices in order to make their companies successful. These sacrifices include delaying or reducing their own compensation before delaying or reducing their employees' compensation.
About a third (32 percent) said they had delayed or forgone compensation for up to two weeks, while 29 percent said they had taken out a personal loan to help make ends meet at home. Also, the vast majority of small business owners say they work 40 or more hours per week: 55 percent say they work 40-59 hours per week and 30 percent say they work 60 or more hours per week.
Therefore, it doesn't seem to be a lack of desire to make personal sacrifices or work hard that is holding many small businesses back. Rather, Feist believes it has more to do with a self-limiting mindset. "We do a lot of advising and coaching to help small business owners overcome the negative impacts of self-limiting thinking. Personal growth and development are at the heart of growing a small business today -- and the possibilities are endless once owners get out of their own way."
"We should be optimistic," adds Hsu. "Entrepreneurs have plenty of reasons to be happy. While some do have concerns, it would take something pretty significant to inhibit the growth we've been experiencing."
Download a free copy of the full Bank of America Spring 2015 Small Business Owner Report.