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Small Business Outlook, Summer 2023: Navigating Challenges, Embracing Growth

The U.S. Chamber of Commerce predicts that, in June 2023, small businesses face a mix of challenges and opportunities on their entrepreneurial journey. While concerns surrounding inflation and high prices persist, there are optimistic signs to be found. Sales are gradually improving, offering hope for businesses eager to bounce back. Moreover, there is a growing momentum in capital investments, with businesses demonstrating their readiness to fuel growth. However, finding suitable candidates to fill job openings remains an ongoing challenge, even as hiring intentions continue to rise. On a positive note, compensation raises are on the horizon, which can contribute to employee satisfaction and retention. Furthermore, there has been a slight improvement in credit needs, reflecting a healthier financial landscape for small business owners.

Beyond the realm of immediate statistics, the broader perspective reveals a flourishing landscape for new business formation. The entrepreneurial spirit remains strong, as indicated by sustained growth throughout 2022. Notably, Georgia emerged as a frontrunner in establishment changes, closely followed by Vermont, Montana, and Virginia. In terms of employment, Nevada took the lead with significant growth, trailed by Texas and Florida. These figures underscore the vitality of small businesses in driving economic progress and job creation.

Technology adoption continues to play a pivotal role in small business success, with cloud computing being a prominent example. Over 90% of small businesses have embraced cloud computing, leveraging its benefits for various applications like backup and web hosting. Confidence in cloud service providers' security measures remains high, underscoring the industry's trust in these platforms. Additionally, small businesses are embracing emerging technologies, including immersive experiences like virtual reality and augmented reality. As familiarity with these technologies grows, small businesses can tap into new avenues for engaging customers and enhancing their offerings.

However, there is an impending concern stemming from the expiration of immediate research and development (R&D) expensing. Failure to renew this crucial provision could result in a 32% increase in taxes, averaging around $59,000 per small business. The potential burden raises the importance of reinstating and making the R&D tax credit permanent, ensuring continued support for innovation and growth among small businesses. An overwhelming 86% of small businesses support a bipartisan approach to reinstating this tax credit, recognizing its value in driving their success and competitiveness.

Although the Intuit QuickBooks Small Business Index reports a drop in employment, it is essential to look beyond this headline figure. Small businesses have demonstrated remarkable resilience, especially in the realm of job creation. Notably, startups have played a significant role in offsetting the overall decline, highlighting their importance as engines of economic growth. Employment in businesses with fewer than 10 employees remains above pre-pandemic levels, reflecting the tenacity and adaptability of small business owners.

As we journey through the ever-evolving small business landscape, EZlocal remains committed to empowering entrepreneurs with the knowledge and resources needed to succeed. By staying informed about the latest trends and challenges, small business owners can make informed decisions, embrace opportunities, and weather any storms on the horizon. Together, let's forge a path towards growth and prosperity.

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