2014 is going to be a good year for small business owners, according to a just released survey. More than half of small businesses experienced growth that met or exceeded their expectations in 2013, with 80 percent reporting that they expect 2014 to be even better for their business; however, economic recovery still reigns top of mind, according to the Rocket Lawyer™ December 2013 Semi-Annual Small Business Survey. The survey gauges overall sentiment and outlook of the main issues impacting small businesses for nearly 1,000 small businesses in the United States twice per year.
While the majority of small businesses believe they will achieve growth in the new year, 50 percent say economic uncertainty is the primary impediment to their business’ growth and 30 percent say overall economic growth and health is a significant worry.
Small Business Outlook for 2014
With 2013 ringing in a record-breaking number of technology IPOs, along with the introduction of the Affordable Care Act (ACA) bringing healthcare issues to the forefront, it is unsurprising that small business owners say the technology industry (36 percent) and healthcare industry (27 percent) have the most opportunity for small businesses. Other sectors noted in the survey include food/hospitality (9 percent), retail (5 percent), education (5 percent) and legal (3 percent)
Looking toward the New Year, small business owners view marketing and brand initiatives as the top priority, trumping raising funds, developing new products or services, hiring or international expansion. More than 40 percent of respondents say they are focused on increasing marketing presence, while more than a quarter claim raising funds as a primary concern. Only 13 percent are concentrating on developing new products or services, six percent are focusing on hiring and two percent are prioritizing international expansion.
Healthcare & the Affordable Care Act
An overwhelming majority (75 percent) of small business owners say the ACA did not have a significant effect on hiring. Less than half (45 percent) say they are not enrolling in ACA in the next year or two. Of those who are not participating, 40 percent said it was because they have less than 50 employees and 30 percent said they were already satisfied with their current plan.
Small Business Hiring
More than a third (36.9 percent) of small businesses plan on hiring additional employees in the next six months. Of those planning on hiring new employees, nearly half say they will hire full-time employees, while 40 percent say they will hire part-time employees. More than half of these employees will be hired as independent contractors, according to the survey.
Small Business Legal Issues
Half of small businesses say they consulted with an attorney this year, with more than a quarter of small businesses claiming complying with government regulations was a top legal concern (26.5 percent). Other legal concerns span debt collection (16.5 percent), lawsuits (16.25 percent) incorporation (14.5 percent), trademark or patent issues (6.75 percent), theft or fraud (5.8 percent) or other (13.7 percent).
Location, Location, Location
When asked what city is the best place to start a business, respondents were given options including San Francisco, Minneapolis, New York, Seattle, Los Angeles, Las Vegas, Boston and Chicago, and a surprising majority (63 percent) said smaller cities are better for small business.
Top Tips for Small Businesses Preparing for 2014
- The Gift of Incorporation. The New Year may be the best time to incorporate–with a filing date of Jan. 1, you will save time because the business doesn’t need to file two separate tax returns for the unincorporated entity and one for the new C-Corp, S-Corp, or LLC. Online legal services such as Rocket Lawyer offer free incorporation documents and cost-effective legal plans for SMBs–with advice from real attorneys.
- Get it in Writing. Almost 40 percent of small businesses reported having legal problems with contracts in 2013, either with negotiations or failure to collect payments. To avoid these issues, always make a contract that outlines the scope of work before the job and is agreed upon by both parties. Creating a contract is essential to ensure on-time payment and puts you and your client on the same page.
- Keep Good Counsel. Of the 861 small businesses surveyed, 58 percent dealt with a legal issue this year. A good business attorney can be the difference between success and failure.
About Rocket Lawyer™
At Rocket Lawyer, we believe everyone deserves easy and affordable legal services. Since 2008 we’ve helped over 20 million families and small businesses take care of their legal matters — so they can focus on what really matters. From free legal documents and business incorporation to discounted rates with outstanding attorneys, we’re there to help every step of the way. For more information on Rocket Lawyer, please visit http://www.rocketlawyer.com and follow Rocket Lawyer on Twitter, Facebook and Google+.
This survey was conducted by Rocket Lawyer October 28 – November 4, 2013 among 861 nationwide small business owners who are Rocket Lawyer members or have used Rocket Lawyer’s services. The margin of error is 3.3% percent.