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The Hartford 2012 Small Business Success Study, released today, reveals that one-third (33 percent) of small business owners are optimistic that the national economy will strengthen this year, down from more than half (61 percent) reported in the company’s spring 2012 study. Despite their economic outlook, most small business owners believe their business is successful in 2012. Sixty-eight percent of owners stated they are moderately to extremely successful, largely consistent with 2011 results.
Buck Buchanan, Owner, Lumpy's Ice Cream (Photo: Business Wire)
The second annual study found that slow economic growth (67 percent), taxes (59 percent) and uncertainty with federal regulations (56 percent) are viewed as major risks by small business owners. But owners report finding ways to take advantage of the slower economy by cutting costs (80 percent), strengthening existing client relationships (76 percent), prospecting for new clients (69 percent) and refining their business strategy (65 percent). Cost cutting actions include taking less money out of the business (68 percent), investing less in expansion (57 percent), reducing owner/partner compensation (52 percent) and hiring fewer employees (50 percent).
“Small businesses are the foundation of the American economy. If we can restore their confidence in the future, they can hire, add jobs and help fuel growth,” said Liam E. McGee, chairman, president and chief executive officer for The Hartford. “The good news is that there are solutions that can help eliminate uncertainty around the tax and regulatory environment, and encourage small businesses to hire. While many small business owners clearly have concerns, they are resilient and dedicated to doing the right things for their businesses and employees.”
Obstacles to Growth
Three in four small business owners (77 percent) say it is likely that their taxes will go up. If those expectations are met, owners say they will offset the impact by passing along costs to customers (66 percent), delaying expansion plans (58 percent), reducing personal investments in their business (55 percent) and stopping hiring (54 percent). Just three in 10 (28 percent) say they would cut existing staff.