Small Business Optimism Soars to Highest Level Since 2004
1. Small Business Optimism Index at Highest Level Since 2004
2. Small Businesses in Best Financial Shape Since Great Recession
3. Trump Spurs Optimism, But Regulatory Burdens Continue
4. Conclusions – Are We Getting Too Optimistic Too Early?
5. IBD: “Busting Five Big Myths About Obamacare’s Repeal”
Small businesses and entrepreneurs have had a rough time of it for these past eight years. New startups and entrepreneurial activity have pretty much been stagnant, weighed down by heavy regulation, high taxes and an economy that’s just been stumbling along. Yet in November and again December, there were signs of optimism and business renewal that could mark a real turnaround in the fortunes of small business.
The National Federation of Independent Business (NFIB) reported last week that its Small Business Optimism Index soared in December by the most in one month since 1980, a year when another maverick conservative-leaning candidate surprised everyone and won the presidency. His name was Ronald Reagan.
Another report out last week found that small businesses are now in the best financial shape since before the Great Recession based on revenues, cash-flows and sales.
While the economy is still far from healthy, we have seen more positive news since the election. Today we’ll look at these two latest reports on small businesses -- and what President Trump will, and will not, be able to do with regard to rolling back onerous regulations early-on in his administration.
Finally, we’ll look at an Investor’s Business Daily editorial last week that blows out of the water the liberals’ scare tactics when it comes to repealing Obamacare.
Small Business Optimism Index at Highest Level Since 2004
The Optimism Index climbed to 105.8 in December, matching its highest level since 2004, with a 38-point jump in the number of small business owners who “expect better business conditions” in 2017. Other indicators such as sales expectations and plans to expand also improved.
“We haven’t seen numbers like this in a long time,” Small business is ready for a breakout, and that can only mean very good things for the U.S. economy,” said NFIB CEO Juanita Duggan.
“The December results confirm the sharp increase that we reported immediately after the election,” said NFIB Chief Economist Bill Dunkelberg. “This is the second consecutive month in which small business owners reported a much brighter outlook for the economy and higher expectations for their businesses.”
“In this month’s report, we are also finding evidence that higher optimism is leading to increased business activity, such as capital investment,” he added. Some 63% of NFIB members reported making capital outlays in December, a significant increase over November.
The other two big movers in the December survey, “Sales Expectations” and “Good Time to Expand,” jumped by 20 percentage points and 12 percentage points, respectively.
Small Businesses in Best Financial Shape Since Great Recession
According to the BizBuySell.com 2016 report, small businesses are now in their best financial shape since the financial crisis -- after years of hunkering down during the Obama administration. BizBuySell is the Internet’s largest business-for-sale marketplace. It reported that in 2016, median small business revenue rose 5.2% to $472,798, while cash-flow -- the main measure of small business financial viability -- rose a healthy 5.4% to $107,551.
BizBuySell also reported that the number of small business sold hit a new high with 7,842 closed transactions in 2016. It said the primary factors for the reported growth in transactions include an improving small business environment, more owners looking to sell, more qualified buyers in the market and better financing options. BizBuySell expects the number of small business transactions to continue to increase in 2017.