I have two questions for you today:
- Are you investing in capital improvements?
- Are you sweetening the pot to attract good candidates?
If you aren’t taking those steps, you can be pretty sure your competitors are.
The May 2018 NFIB Small Business Optimism Index survey reports that 67 percent of small businesses are making capital outlays and 35 percent say they are boosting wages to attract qualified job applicants. The capital investment responses breakdown like this:
- 47 percent are spending on new equipment,
- 24 percent are buying new vehicles,
- 16 percent are expanding facilities (expansion plans were the highest in survey history), and
- 30 percent plan capital outlays in the next few months.
Small business owners are putting their money where their optimism is. The optimism index, by the way, is at its second highest level in its 45-year history. It rose to 107.8 in May, a three-point gain over the previous month. Sales, compensation, and profits all posted gains.
These monthly surveys mean little as snapshots, but can be very useful when you take a step back and analyze the trends. I think one change we saw in May is a greater propensity to raise wages than we had seen in previous months. We know that the tight available labor pool should be pushing up wages and it seems that this is finally exerting more influence on small business leaders and hiring managers.
Fortunately, profits and sales are going up at the same time so small business owners have the headroom to increase compensation without sacrificing their bottom line.
But to get back to my original questions: If you aren’t proactively—and by “proactive” I mean spending money—growing your business and your team, you’re probably missing the boat. It seems like we’re in a period of growth and optimism that doesn’t occur very often in any generation.
And frankly, we know there is something called the business cycle, so these good months or (hopefully) years will wind down at some point. There’s a proverb that has been around for hundreds of years: Make hay while the sun shines.
The sun is shining on small business right now, so it’s time to start making hay!