A new year should always overflow with optimism, but for small businesses, the past 5 Januaries have been burdened with the memories of difficult years. There was little to look forward to when it came to financial growth. Finally though, for owners still open to optimistic ideas, the grass is actually looking greener on this side of the New Year. Entrepreneurs are naturally optimistic and confident humans, and in 2013, they could finally meet an economic climate that rewards their positivity.
An ONTRAPORT report, surveying over 600 small business owners, showed that small businesses almost universally anticipated growth and hiring boosts in 2013. The only negativity to come out of the survey involved owners’ ideas about how to finance a business in this lending climate. But keep reading and you’ll see that there’s very promising news on the small business financing front as well.
So, without further ado, here are three big ideas for small businesses to be optimistic about 2013.
1. The holidays were huge
The most promising sign for 2013 is the fact that small businesses finished 2012 so strongly. Small businesses count on the holidays to bring in a big increase in sales, and the early news about this past holiday’s sales numbers are very encouraging. More than 80% of the small businesses surveyed by ONTRAPORT were expecting an increase in their December figures, and the success of Small Business Saturday to kick start the season was a major national news story. Close to 40% of respondents to the survey predicted their holiday sales would grow in 2013 by 10% or more.
2. Small business hiring will continue to grow
We heard again and again during election season that small business hiring accounts for 2/3 of the jobs created in the United States. That number was in danger of dipping as economic constraints made hiring impossible for so many business owners. But looking forward to 2013, nearly 60% of the small business owners surveyed planned to add employees this year. With the economy growing, a steady flow of customers are back to doing business with local merchants, and small business owners are finding the working capital available to add staff to handle the load. As job creators, small businesses will continue to lead the way and finally have the means again to staff up.
3. Promising developments in small business financing options
How do I finance my business? It’s a question that used to have a simple answer: apply for a business loan. But looking into 2013, nearly 40% of the owners surveyed by ONTRAPORT felt it was harder to find small business financing now than in the past. That dip in confidence led 60% to claim they wouldn’t seek financing in 2013. The truth is, business loan rates are more favorable now than they have been in years, but tightened credit restrictions have made the application to get one a grueling, drawn out process that too often results in disappointment for business owners.
Sorry for stifling this post’s unbridled optimism with bank loan talk. Let’s focus on the good news when it comes to the future of small business financing. Alternative financing solutions—private companies acting as direct funders to small businesses—are giving merchants new ideas to consider. Well, not exactly new. For a decade, products like merchant cash advances and non-traditional business loans have existed as unsecured, short-term working capital options. These funders take on more risk than banks, and are in a position to say “yes” at a time when banks are looking for reasons to say “no” (and don’t have to look much further than a personal credit score to do so).
But since the credit crunch, these financing options have grown rapidly in popularity. That means more and more competition in the alternative funding market, and competition typically bodes well for consumers. In 2013, merchants will have more funding choices than they did in 2012, and won’t have to put all of their proverbial eggs in the bank and SBA loan basket. In a nutshell, in 2013 and beyond, when you ask yourself “how can I finance my business?” the answer promises to be much more encouraging.