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Study details impediments to small business growth

Fully 72 percent of small business owners responding to a survey said they’d like to expand and add employees within the next five years, but various impediments stand in their way.

Uncertainty and weak sales rank among the chief factors hindering small business growth. But politics and regulations also play a role, said William Dennis, a senior fellow at the National Federation of Independent Business (NFIB) Research Foundation who wrote a report on the findings of the survey.

“Impediments to growth may not be easily overcome, but if we are ever to bridge the gap between desired and actual growth, government officials must look at the problems small businesses face,” Dennis said. “Understanding the challenges should help with the formulation of policies that would help them to thrive.”

The survey results found that uncertainty and weak sales limit the ability of many small business owners to expand. While economic concerns rank high in the minds of owners, a large number of owners also reported that uncertainty remains a significant factor in making business decisions. The single most important indicator that would renew small business owner confidence in business conditions is increased sales.

Fully 61 percent of owners responding to the survey cited uncertainty as an impediment to growth. Owners of the smallest and youngest firms were more likely to identify uncertainty as a concern than owners of larger and more established firms. While 83 percent of owners think of uncertainty in economic terms, 51 percent of owners who think uncertainty is an impediment to growth blame politics at least in part.

While the adverse effects of regulation remain challenging to identify, 40 percent of small employers identified regulatory or legal issues as an impediment to growth. The regulatory environment, rather than a specific regulation or set of regulations, was more often cited as an obstacle. And 25 percent of those who cited regulations as a burden said they either cancelled a project scheduled for the next six months or abandoned a project or investment.

Meanwhile, 41 percent of owners cited lack of financing as an impediment to growth and 19 percent ranked it as a serious matter. Although 15 percent of owners ranked lack of financing as their biggest obstacle to growth, 49 percent termed it a minor obstacle or no obstacle at all.

Just 15 percent of small business owners cited the lack of a strong management or advisory team as an impediment to growth.

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Posted by on Dec 6 2011. Filed under Business News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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  • http://www.facebook.com/TheClubAsteria Club Asteria

    Thanks for giving the results of this survey.  Interesting how small business owners are hesitant in taking risks due to the state of the domestic economy.  Good points.

  • http://www.facebook.com/TheClubAsteria Club Asteria

    Thanks for giving the results of this survey.  Interesting how small business owners are hesitant in taking risks due to the state of the domestic economy.  Good points.

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