For small businesses all across the U.S., business conditions will get better this year, most noticeably in the second half, when the overall economy shifts into higher gear. The rate of improvement will vary, of course, depending on the type of small business, where it’s located and the customers that it serves.
Among the fastest gainers: App developers, software firms, a variety of professional service firms in accounting, insurance, architecture, etc., and restaurants, including a growing number of franchises that serve fast food, from hamburgers to salads.
Two sectors to note, in particular, are housing and tourism. As housing sales continue to rev up, smalls serving construction will see increased orders for building materials, equipment rentals and more. One Maryland-based developer of specialized software for construction firms tells us he’s seeing sales pick up as builders ramp up for higher levels of activity.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
With respect to tourism, the relatively low cost of gasoline figures to induce many more Americans to travel farther this year, whether to beaches, mountains, amusement parks or elsewhere. Moreover, the strong U.S. dollar will slow but not dramatically curtail foreign visitors. Increased travel will benefit a wide variety of businesses that cater to vacationers.
Many other key industries remain sluggish, including energy, mining, agriculture and shipping/exporting, because of weak global demand and low prices for oil, farm and other commodities. The brawny greenback also hurts exporters.
Still, there are at least glimmers of a rebound later this year and next. More machine shops are seeing their order books stabilizing or even perking up a bit. Small firms overall are having continued success obtaining credit, though it’s easier for larger smalls -- those with annual sales of $100,000 or higher -- to get loans than microbusinesses and start-ups, which have yet to prove themselves.
Labor shortages are cropping up in some sectors, notably high tech, health care and financial services. Food services in large metro areas are also having a tougher time finding workers. Construction companies are likewise hampered by a dearth of skilled tradespeople.
New regulations from Washington loom as dark clouds over smalls: A pending rule from the Department of Labor on pay is proposing to more than double the minimum salary workers must be paid -- to $50,440 a year -- before they’re exempt from overtime pay provisions in the Fair Labor Standards Act. Another proposes to lower the level of silica dust in the air at work sites. It would raise compliance costs for small firms in construction and manufacturing.
-
Here's How To Get Organized And Work For YourselfWhether you’re looking for a side gig or planning to start your own business, it has never been easier to strike out on your own. Here is our guide to navigating working for yourself.
-
How to Manage Risk With Diversification"Don't put all your eggs in one basket" means different things to different investors. Here's how to manage your risk with portfolio diversification.
-
U.S. Manufacturing Is Already Ailing from CoronavirusEconomic Forecasts Supplies are hard to come by, and in the longer-term demand may be at risk.
-
Will You Have to Pay More Sales Taxes on Your Online Purchases?business One thing’s for sure: Consumers who live in one of the five states without a sales tax won’t be affected by the Supreme Court’s ruling.
-
What to Expect From the New Fed Chief
Economic Forecasts By and large, Jerome Powell will move along the path set by his predecessor.
-
How a Border Tax Would Affect You
Business Costs & Regulation A plan to limit imports could raise prices but also create more jobs.
-
A Housing Shortage Looms: Builders Can’t Keep Upbusiness Starter homes especially are becoming scarce.
-
Help Wanted in America: Skilled WorkersTechnology In an ever-more-competitive job market, technology increases the need for skilled workers.
-
The Unintended Consequences of a Boost in Overtime Pay
Business Costs & Regulation New rules mean millions more employees will be overtime-eligible. But will employers find workarounds?
-
U.S. Economy to Perk Up in Second Half
Economic Forecasts Consumers are recovering from a swoon induced by a wobbly stock market. But energy, other sectors will continue to struggle.
