Want to start your own small business? Better take a look at Gallup's annual small business confidence index first. It may give you second thoughts.
Gallup does the survey in conjunction with Wells Fargo, and has been doing so since 2003. The index's chart over that time would make a grand design for a theme park roller coaster — a ride perhaps more thrilling than most business people would want to take.
The good news is that the latest survey showed the index at its highest level since 2008. The bad news is that it's still far below its pre-recession peaks.
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The index, a combination of factors that reflect a business's overall health and outlook for the near term, came in at 71 in the most recent poll. That's a lot better than the steepest valley recorded in 2010 — a negative 28. But it's still a far cry from the peak years of 2005-2008, when it soared to well over 100. The highest recorded was 114 in 2007.
Even with the recovery officially starting a couple years ago, the folks in small business world just weren't doing very well. As recently as a year ago, the index stock stood at 24. So the uptick has been healthy, but, oh, what a ride these entrepreneurs have been on.
Significant findings from the survey include:
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Small-business owners are feeling better about their companies' revenues, with nearly half (49 percent) reporting that their revenues have increased "a little" or "a lot" over the past 12 months. This is a seven-percentage-point uptick from the fourth quarter of 2014 and represents the highest reading on this measure since 2007.
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A net positive hiring situation, with more owners reporting hiring over the last 12 months than decreasing their workforce.
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34 percent of small-business owners report that it has been easy for them to obtain credit, up from 28 percent a year ago.
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Small increases in owners' positive ratings of 11 of the 12 metrics comprising the overall index.
"Small-business owners' improving views of their revenues and other aspects of their businesses [continue] the general upward movement seen in the index since it reached its low point in 2010, although it remains below the high points registered in the years prior to the Great Recession," Wells Fargo/Gallup concluded.
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
