Is Your Small Business Fiscally Fit?

By | Small Business

2015 is almost half over (scary, I know!), making this a good time to assess your small business’s growth outlook and need for working capital. According to the most recent Small Business Health Index from CAN Capital, there is both good and bad news on this front. First, about half (49 percent) of small business owners predict their businesses will grow in the next 12 months. While that’s a decline from 58 percent who expected to grow in the last survey (September 2014), more entrepreneurs (40 percent vs. 34 percent) expect their businesses to remain stable.

However, there are some worrisome factors on the horizon. Small business owners face concerns such as increasing competition, the growth of digital marketing and rising regulation and employment costs.

The good news: As they tackle these challenges, only 30 percent of respondents expect to need outside capital to run their businesses in the next 12 months. That’s a big drop from 43 percent in the prior survey. What’s more, those who seek capital, are finding it substantially easier to access. Only 38 percent say it’s “quite” or “extremely” challenging to obtain working capital—down significantly from 61 percent who said the same thing in the prior survey.

In fact, outside capital has become so much easier to get that traditional bank loans are the number-one way small businesses access financing/working capital. This is the first time loans have topped friends and family financing in popularity.

Now for the bad news: While getting financing and working capital has become much easier, small businesses are struggling with a new financial challenge—the shift to mobile and digital payments. The survey found:

  • Fewer than half (44 percent) of small businesses currently accept payments online.
  • Just 13 percent accept mobile payments such as Apple Pay.
  • Over half (55 percent) are aware there will be a transition to EMV (chip & PIN) credit cards starting October 1. However, just 19 percent have taken any steps to update their point-of-sale systems for EMV compatibility. And only 18 percent have plans to invest in new payments technology in the next 12 months.

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Most of us are used to making most of our payments online. And if you’ve ever done business with a company that uses mobile payments, you know how much easier it makes your life—no need to carry cash or be limited in what you purchase. This technology isn’t limited to big businesses, either. Just in the past week, I used mobile payment technology to make purchases from a small retail boutique, a food truck and a crafts vendor at an outdoor event.

In short, updated payments technology helps your small business compete with the big boys. But if you don’t make those updates, you risk falling drastically behind. It’s important to make wise investments in updating your payments technology. Seek the guidance of a trusted mentor in making these decisions—but don’t delay. Otherwise, your financial foot-dragging could limit your business’s future.

About Rieva Lesonsky

Rieva Lesonsky is CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email Rieva at rieva@smallbizdaily.com, follow her on Google+ and Twitter @Rieva, and visit her website SmallBizDaily.com to get the scoop on business trends and sign up for Rieva’s free TrendCast reports.  

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