For the majority of small businesses, increased revenue is outpacing increases in taxes. That’s the consensus from a new survey by online payroll provider SurePayroll. SurePayroll recently unveiled its April 2014 Small Business Scorecard covering the previous tax year.
The survey showed that 60 percent of small business owners saw revenues increase during the previous year. Meanwhile only 57 percent saw increases in their taxes.
The survey also showed that slightly more than 33 percent of those small businesses saw revenue increases of 15 percent or more during the 2013 tax year. Meanwhile, only 20 percent of small business owners participating in the survey saw their taxes increase by that much over the same period.
But despite increase in revenue, most small business owners haven’t started hiring more employees yet. SurePayroll’s survey found that hiring has remained stagnant in most regions across the country. Hiring has actually fallen slightly in the Midwest and Northeast while other areas are relatively stable.
Instead of looking for permanent help, small businesses are turning to subcontractors to handle much of their extra work.
The use of Form 1099 for independent contractors by many small business owners has kept these companies running leaner. According to the SurePayroll Scorecard, 6.52 percent of all the paychecks issued last month went to 1099 workers. This figure has been on a steady rise since February, the survey data reveals.
In an official blog post commenting on the Scorecard, the company explains:
“It’s a bit of a double-edged sword, as increased hiring would obviously be a boost to the economy, yet strong revenues are a testament to small business ingenuity.”
SurePayroll also reports that small business owners are feeling more optimistic about the future. A total of 69 percent of small business owners surveyed said they have a positive outlook moving forward and that number has been rising steadily since February.
SurePayroll is a provider a payroll services to small businesses nationwide. The company’s Small Business Scorecard is provided monthly and surveys the nation’s smallest businesses with fewer than 10 employees.
Image: SurePayroll
SurePayroll report is definitely a confidence booster from revenue point of view, but we are all looking forward to get a glimpse of rise in employment factor. Basis on which we can say that US is getting back on track.
The revenue growth has just started to increase. In fact, small owners, who work on small margin, are not confident enough on the economy as well as the prospect of their business. They have just started getting more works and for the surplus works they are not making any fresh permanent hiring. In fact, they are resorting to freelancing. In fact, the number of freelancers as well as freelance work volume has soared in the last one year. It is only a matter of time coupled by more expansion of works that the confidence of the small owners will come back and they will start hiring again.
This is some encouraging news for small businesses. I hope the trend continues and Small businesses play a vital role in bringing the economy back on its feet.
Kelly Boros
It is no surprise that the use of contractors is on the rise. Using contractors saves small businesses money in that they don’t have to pay for insurance, benefits, taxes, and vacation time. Add in advancements in cloud computing that allow workers to access their files from the office, from virtually anywhere – more and more businesses will hire out contractors to work both in-house and off site.