Federal Reserve reports U.S. business ownership drops to lowest level on record
According to a recently published report from the Federal Reserve titled “Survey of Consumer Finances”, the share of American families that own a business dropped significantly between 2010 and 2013, falling to its lowest level since the Federal Reserve first began tracking in 1989.
Findings from the report show that the decline in private business ownership spans both higher and lower income households. Additionally, over the last three years, the typical business-owning household lost money on its entrepreneurial activities.
The report also states that between 2010 and 2013, the segment of U.S. families with business related equity declined from 13.3 percent to 11.7 percent. Furthermore, the value of the equity holdings of median business-owning households declined by one-fifth between 2010 and 2013.
However, the value of business equity at the average business-owning household grew in the same period. The Fed’s figures show that the mean value rose from $844,800 in 2010 to $973,900 in 2013 when measured in inflation-adjusted dollars. The most recent number remains below its 2007 peak of $1,062,500.
Download a copy of the report at federalreserve.gov/scf
CapitalOne is feeling upbeat on small business
In commercial lending, CapitalOne’s Keri Gohman told the Associated Press recently that business owners are reporting better earnings and reinvesting in their businesses and it’s translating into a rebound in loan demand.
According to Gohman, CapitalOne has seen loan demand pick up with applications reaching pre-recessionary levels. During the Great Recession CapitalOne saw business owners really pull back, as they were concerned about the future and began to save their cash. As the economy started to improve, and business sentiment turned more positive, they have seen small business earnings begin to recover, and businesses are starting to reinvest. While not all business owners are using loans to invest, some are taking advantage of the savings they set aside. Many business owners don’t want to become too leveraged.
Harvard Business School paper says U.S. is falling down on education, workplace skills and transportation infrastructure
Harvard Business School has just released the 2013–2014 survey on U.S. competitiveness. The report’s findings focus on a troubling divergence in the U.S. economy. While large and midsize firms have rallied strongly from the Great Recession and highly skilled workers are prospering, the report showed that middle- and working-class citizens, as well as small businesses are struggling. The survey asked Harvard Business School alumni to assess the state and trajectory of U.S. competitiveness, and to evaluate elements of the business environment that prior research has shown to be drivers of national competitiveness.
Overall, the survey depicts an economy that is on the mend and faring better than some other advanced economies, but is not structurally equipped to do its full job with major weaknesses in three key areas — the K–12 education system, workplace skills and transportation infrastructure.
In education, the United States has among the most literate 55 to 65 year-olds in the world, but the same is not true of younger workers. The United States faces similar challenges in problem-solving and math skills. What were once American advantages in human capital have turned into disadvantages. Relative performance matters in global competition, where American workers must out-produce and out-innovate the world’s best.
Troubles in workforce skills have been evident in the United States for years. Shortages make it hard for firms operating in the U.S. to increase their productivity consistently. In annual surveys conducted by ManpowerGroup since 2006, the portion of U.S. employers reporting difficulty in filling positions reached as high as 52 percent, with “lack of technical skills” in applicants among the top causes.
In the transportation portion of the survey, respondents were asked about issues that create problems, reduce quality or raise costs for their firms’ U.S. operations. Forty-six percent pointed to highway traffic congestion and 45 percent pointed to airport delays and inefficiencies among their top three complaints. Other leading pain points among business leaders included deteriorating roads or bridges and the lack of public transportation for employees or potential employees.
You can download a copy of the full 2013–2014 Survey on U.S. Competitiveness from hbs.edu.
Small Business Tool Box
Let’s be honest, when it comes to creating graphics and visuals for an online presence, not everyone is a design genius. But thanks to a great new tool, creating graphics for business communications is a breeze. Canva enables users to create stylish, eye-catching designs for social media and a wide variety of other graphical needs. Better yet, it can all be done online using a web browser. Canva makes sizing images for various social media channels a snap by offering an extensive array of starter templates. From there a user can create a new design from a blank canvas, or use one of the designs from the Editor’s Pick gallery. The great thing about Canva, in addition to its simple intuitive interface, is it has a really economical cost model. A user can design an unlimited number of graphics for free, and Canva offers an extensive library of stock photos and illustrations for $1 each. Users also have the option of uploading their own photos to make them part of the design.
To learn more, visit www.Canva.com
That’s it for the Small Business Brief this week. Before we sign off, remember, small business is the engine of our economy, so get out there with your wallet and rev it up America! Also, be sure to subscribe to our channel or to our blog to be notified of our next Small Business Brief. Thanks, and we’ll see you next time.