South Florida’s smaller businesses are bigger on optimism

Written by Michael Lewis on August 15, 2023 Advertisement South Florida’s smaller businesses are hopeful as they assess their future – at least, their future in the next six months. If the economy, mother nature and political winds don’t interfere, far more see demand rising for what they sell than […]

Written by Michael Lewis on August 15, 2023
  • www.miamitodayepaper.com

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South Florida’s smaller businesses are bigger on optimism

South Florida’s smaller businesses are hopeful as they assess their future – at least, their future in the next six months.

If the economy, mother nature and political winds don’t interfere, far more see demand rising for what they sell than see demand slackening, almost a quarter expect to be able to raise prices, and three times more think their performance will be excellent than think results will be poor.

Their thoughts were gathered by the US Census Bureau in a new study called the Business Trends and Outlook Survey, which takes the pulse of businesses in mountains of statistics that they leave to others to decipher and interpret.

Our interpretation of these businesses based on their answers is optimistic, which may be the nature of leaders who rely on a hands-on view of business rather than from the ivory tower of academia or the board rooms of corporations.

Optimism may also be inbred in South Florida, which is predominantly a small business economy with a long history of rapid growth, or in the immigrants from abroad who see South Florida as the land of opportunity.

In up-to-date outlooks from the end of July, 1.2 million single-location businesses across the nation excluding farms told the Census Bureau their thoughts about the business environment in six-minute questionnaires. We extracted the Miami Statistical Area that is basically Miami-Dade and Broward counties to take the small business pulse.

As those businesses assessed their status, 12.5% said it’s excellent – far above claims for the entire state of 10.2% excellence. At the other end of the scale, 19.6% branded their businesses below average and 4.9% said they were in poor shape.

But July was not kind to smaller businesses here – 26.4% said revenues were down from two weeks earlier while only 9.1% said they had risen, which could well be a seasonal drop. In the same period, they said demand for their products or services was up from two weeks earlier but 24.5% said demand had fallen. And 9.9% had fewer employees than two weeks earlier, while just 4.8% had more.

But in the July heat in which businesses were reporting less demand, lower revenues and fewer employees in the past two weeks, when they looked six months ahead to a cooler January they were predominantly positive.

Asked to forecast how they would be doing in six months, 10% said the outlook was excellent, 21.3% said above average, 50.6% average, 14.9% below average and only 3.3% poor.

And while more businesses had lost employees in the past two weeks than had added, looking six months ahead 13.3% expected to add workers while only 6.3% expected fewer. Moreover, in today’s tight market for hiring qualified employees, 31.1% said they expect no trouble in hiring in six months versus 18% who foresee problems in filling openings.

South Florida’s smaller businesses also see demand rising for what they sell – 18.2% expect higher demand in six months and just 12.9% expect lower.

Though all the surveyed businesses now have one location, 2.3% said they expect to open a new location in the next six months.

South Florida’s small businesses also look forward to charging more – 23.8% expect to raise prices within six months while only 4.3% expect to cut prices. But they also expect to pay their suppliers more: 41.2% expect prices they pay to rise and almost none expect to pay less.

Of these smaller companies, 9.5% expect more online efforts to sell, even though most say they do no online sales now.

Most revealing, South Florida’s smaller businesses believe they can foresee their economic futures further ahead than do smaller businesses elsewhere – though nobody seems to use the five-year plans that used to rule business budgets.

Asked how far ahead they could predict performance, 19.1% said they could look more than 12 months into the future. By comparison, only 16.9% of small businesses in the New York City area said they could predict that far ahead, just 16.5% in Orlando and only 11.4% in far-off Minneapolis, which is an area about as unlike Miami as we could find.

In South Florida another 21.2% said they could chart their courses seven to 12 months ahead and feel comfortable. In Orlando 23.4% said they could do that, 21.5% in New York and 19.9% in Minneapolis.

At the other end of the scale, a full 11.4% of smaller Minneapolis businesses said they could predict their performance only at most one month or even less into the future, versus 9.4% in New York, 8.9% in Orlando but only 6.8% in South Florida.

Right or wrong, we seem to have far more confidence in our ability to see what’s coming.

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