“Even with profound uncertainty small businesses are looking to hire. Policy makers should seize businesses’ desire to expand by increasing availability to all sources of capital, especially bank loans and providing further tax incentives for small businesses – both of which will improve our overall economy.”

While business owners have a negative outlook on general business conditions, small business owners report they will hire in the coming months. Nearly half (44%) of the 10,637 privately-held businesses that responded to the survey report they plan to hire additional staff in the next six months. For those looking to hire, 47.8% said sales and marketing skills are in the greatest demand, 41.6% prioritized skilled labor while 38.8% are looking for employees with service/customer service skills.

Small businesses said the top reasons preventing them from hiring new employees, 49% of respondents cited economic uncertainty, followed by 30% who said consumer demand, 23% identified government regulations and taxes and 22% listed access to capital. In addition, 34% of privately-held businesses indicated that providing increased access to capital and 24% said tax incentives are the surest path to job creation.

“A continued political stalemate and the potential for a European debt fall-out are likely driving business pessimism,” said Dr. John Paglia, lead researcher of the Pepperdine Private Capital Markets Project and associate professor of finance at Pepperdine University’s Graziadio School of Business and Management. “Even with profound uncertainty small businesses are looking to hire. Policy makers should seize businesses’ desire to expand by increasing availability to all sources of capital, especially bank loans and providing further tax incentives for small businesses – both of which will improve our overall economy.”

Other key findings in the State of Small Business Report include:

• When asked about the need to train new hires, 82% of respondents indicate that they will need to provide training to new employees.
• Privately-held businesses think there are opportunities for growth in the next twelve months with 39% of respondents saying that opportunities will increase slightly and 20% saying that opportunities will increase significantly.
• Of those respondents that tried to raise capital in the previous twelve months, 35% applied for bank loans and only 50% of them were successful. Whereas, 16% of respondents looked to friends and family for funding and 79% of them were successful.

Download Pepperdine’s State of Small Business Report at http://bschool.pepperdine.edu/smallbiz2011

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