Small Businesses See Growth In 2011

Half of small business owners (50%) are optimistic about their chances for growth in 201, according to a new survey released by Paychex.

 At the same time, nearly half (47%) report that recent government regulations have slowed or prevented growth.

Tax changes (56 percent), healthcare reform (39 percent), and state regulations in response to budgetary challenges (25 percent) were cited as the top three regulatory issues most impacting small businesses. The research found that 61 percent of respondents have seen more government regulation over the past five years.

When asked about what business issues “keep them up at night,” uncertainty about the economy, the need to add customers and revenue, and concerns over cash flow were the most common responses.

“After several extremely difficult years for small businesses, 2011 is shaping up as a year when indicators of progress and growth appear to be moving in the right direction for many categories of small business,” said Martin Mucci, Paychex president and CEO.

“While regulation clearly weighs heavily on the minds of small business owners, optimism for growth and plans for adding employees bode well for small businesses in particular and the U.S. economy in general.”

Respondents were also asked their opinions about employee benefits. Fifty-nine percent of small business owners said offering health insurance to be important, while 47 percent consider it important to offer retirement benefits. However, only 29 percent and 17 percent of all small business owners offer health insurance and 401(k) benefits, respectively. Among companies with 5 to 50 employees, 57 percent offer health insurance, with 13 percent planning to do so soon, while 39 percent offered 401(k) plans.

“While concerns about cost likely serve as a barrier to offering benefits for small business owners, the costs may not necessarily be as burdensome as owners might think,” said Mucci.

“For example, we have found that by working closely with health insurance providers and our clients, we can develop health insurance programs that are affordable for small businesses and help them meet their goals of providing adequate coverage.”