Joyce M. Rosenberg
Small-business owners are probably glad to put 2013 into the books.
For many, it was a frustrating year of waiting. Waiting to learn about the new health-care law. Waiting for lawmakers to solve budget disagreements. And waiting for the economy to improve.
Many put off decisions such as purchasing equipment and hiring as they sought clarity. But in the end, owners fought inertia and appear to be looking forward to 2014. Hiring seems to be showing an uptick and lending to small businesses is improving.
Hereís a look back at the 2013 small-business economy:
Small businesses began 2013 with questions and by the yearís end, there were few answers.
Companies struggled to sign up for insurance for employees on federally run websites. After computer glitches and delays, the government said businesses would have to buy through brokers, agents and insurance companies until November 2014.
Coverage that goes into effect Jan. 1 or later must conform to the law. Many businesses sidestepped the requirements by renewing policies in 2013.
Owners had mixed reviews about coverage on government websites. Some with mostly younger workers found theyíll be paying more than expected. The law is designed to lower premiums for older and sicker workers by including younger, healthier ones in the pool of insured people.
Many owners were disappointed by the limited choice of plans.
There were some positive reviews. Some owners said they were pleased with the premiums they found on the websites because they were comparable to the rates they were already paying.
Experts said it will take at least a year for businesses to know how the law will affect them.
The $85 billion in budget cuts that took effect March 1 hurt small businesses with federal contracts.
Some lost revenue and had to lay off workers. Retailers whose customers include federal workers also lost revenue. Businesses in states with a large concentration of government facilities, including Virginia and California, bore the brunt.
The government shutdown and deadlock in Congress over the budget in October was more harmful to small businesses than larger companies. Some federal contractors couldnít get paid. Companies that wanted Small Business Administration-backed loans had to wait longer for approvals.
In January, small businesses added 106,000 jobs, according to payroll provider ADP. But optimism about a small-business hiring boom dissipated as the number of new jobs fell in February and then averaged nearly 70,000 through October.
Owners said they werenít planning to add workers because they didnít have the sales to justify the expense, or they didnít need to hire to grow, according to an American Express survey back in the spring. Uncertainty about health care also made them wary.
Through most of the year owners stuck to those plans, but then came a glimmer of hope. ADP reported that small businesses created 102,000 new jobs in November. More insight that could bode well for small-business hiring next year came from a Bank of America survey. Thirty-one percent of owners questioned in the fall said they planned to hire, and 56 percent said they needed employees to boost business in 2014. That could be good news for the broader economy because more than 99 percent of U.S. companies are small businesses, and they employ about half of U.S. workers.
The largest of small businesses had an easier time obtaining credit in 2013, partly because they are healthier, said Jeffrey Stibel, CEO of Dun & Bradstreet Credibility Corp. Revenue at larger small businesses had growth of slightly more than 1 percent, according to the company, which issues credit ratings. The smallest werenít as heartily embraced even though revenue grew at a faster 2 percent pace. The difference? Banks tend to be more comfortable lending to larger companies.
Another positive sign for lending: The popular Small Business Administration 7(a) loan program showed growth. Banks made nearly $18 billion in SBA-backed loans in the fiscal year ended Sept. 30. Thatís up from above $15 billion the previous year, but still below the $19 billion in SBA loans granted in the 2010 fiscal year.