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Posted: Monday, 12 May 2014 5:15AM

Little guys mean big business in Louisiana



May 12 - 16 is National Small Business Week, which recognizes the critical contributions of America's entrepreneurs and small business owners.

More than half of Americans either own or work for a small business, and they create about two out of every three new jobs in the U.S. each year.

Here in Louisiana, small business and entrepreneurship seem to be flourishing.

"In Louisiana, you've got 76,000 small businesses that employ another 625,000 employees," says Mike Barton, President of Allstate Business Insurance.

Certainly, in New Orleans, entrepreneurship is alive and well, as indicated by the recent success of New Orleans Entrepreneur Week, presented by The Idea Village and the work of the New Orleans Business Resource & Entrepreneurship Center.

But, a recent survey, done by Allstate, shows small businesses in the area face the same concerns faced by similar businesses across the country.

The Allstate survey asked small business owners, simply "What keeps you up at night?"

"The answer came back in a very resounding and consistent way," says Barton. "Five things kept them up at night. The first of which is financing, to either start up or continue to operate a business. They're concerned about growing their business and growing it profitably to make money."

"And then, the big thing was doing so...doing all three of those things in a highly complex regulatory environment. And then, finally, once you've surmounted all of those hurdles, to take care of the business...to protect it against the myriad of bad things that can happen to the business every day."

Small business owners in Louisiana tend to be doing well, but are taking a conservative approach toward future growth. Recent surveys indicate they're optimistic though cautious about hiring.

"I'll tell you, the biggest business expense is labor," Barton says. "It represents about half of their total revenue. So, it's their single largest expense."

"On the flip side, it's also their single biggest opportunity. It's your human capital, the humans, that touch your clients...that wield in, hopefully, your new clients and produce your product. So, it would be hard to imagine that small businesses could succeed, in a sustained way, without a really advanced and modern human capital strategy."

But, according to a Capital One survey, many businesses report they can't find the hires they need. Only 51 percent of 300 small business owners interviewed believe job candidates are prepared for the demands of the workforce. 35 percent of them cited 'interest in the job' as the attribute is most lacking in prospective employees.

Barton says firms with high-performing employees grow three times faster than their peers, and those with an 'engaged staff' show a 350 percent growth variance between high and low-performing firms.

Just two out of five small businesses surveyed by Capital One said they plan to hire in the next six months. That's despite recent growth.

67 percent of Louisiana small business owners reported their sales have either increased or remained steady from October through December 2013, according to the quarterly survey from Capital One. 33 percent reported a drop in sales.

Barton says the minimum wage issue, health care reform, government relations, tax requirements and the ability to finance loans all fall into the aforementioned category of complex regulatory environment. And, he says small businesses don't have the vast resources of the Fortune 500 companies.

"These small business owners are the equivalent of one-armed paper hangers," says Barton. "They're doing a lot of things and they need help."

 

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Topics : Business_FinanceLabor
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Locations : LouisianaNew Orleans
People : Mike Barton
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