As business owners across the U.S. fight to grow their companies, one thing seems to be constantly weighing on them: How will this economy affect my business in the future?
An issue that has been floating around the media is the Fiscal Cliff. This is the term that has been used to describe the conundrum that the U.S. government will face at the end of 2012. The main issues analysts have focused on are the expiring Bush tax cuts that will add to tax burdens, the automatic budget cuts that will disembowel most government programs, and the expiration of the payroll tax holiday.
More than 1,000 CEOs were surveyed by a private professional association, and they reported a continued slowdown in economic growth and anticipated that overall economic conditions would remain passive into the start of 2013. Data showed a small decline in confidence as businesses wait for the uncertainty about federal tax and spending polices to be resolved.
- 51% of CEOs take the threat of the ‘fiscal cliff’ very seriously.
- 82% of CEOs believe that the U.S. debt burden of $16 trillion has an impact on their business growth.
- 57% of CEOs believe proposed increases in tax rates for those making $250,000 or $1 million would affect their small business growth.
- 80% of CEOs say that the payroll tax holiday had not provided their company with greater capital to invest and expand their business.
- 66% of CEOs expect their firm’s revenues to improve in the next 12 months.
- 49% of CEOs expects their firm’s total number of employees to increase during the next 12 months.
The most powerful tool business owners can possess while moving into this uncertain economic future is a strong solid plan. Are you being proactive or reactive to economic changes? Where do you see yourself and your business in short and long term goals?
One idea business owners are considering is an “early-out” option. Economic recovery is uncertain and may take many years, so selling today verse waiting until the country HAS to deal with the booming deficit may be the better decision. Due to the unsettling stock market, many strategic companies, as well as private equities, are investing money back into their business through acquisitions of other companies and are paying super premiums to do so! Today, there are about 50 buyers for every one seller. Now could be a great time to pull some chips off the table and cash in on your years of hard work.
Statistics provided by Vistage