Small Businesses: “We Need Customers, Not Loans”

The National Federation of Independent Business (NFIB) has released its November Small Business Economic Trends report.  When polled, small businesses believe conditions are getting a little better — but just a little.

The problem, the report suggests, is that small businesses need customers and sales more than anything.  When they get more customers and/or those customers buy more, small businesses in turn will be able to make capital purchases and do more hiring.  But until customers loosen the purse strings, conditions for small businesses will remain challenging.


The Small Business Optimism Index rose 0.3 percent to 89.1 in October, as the above chart shows.

  • The good news:  this is the highest level in over a year, since September 2008.
  • The bad news:  it’s far below the five-year peak of 107.7 in November 2004.


Employment: In the last three months, 8 percent of respondents had increased employment, but 19 percent had cut employment.

Capital Expenditures: Plans for capital expenditures in the next few months fell one point to 17 percent, just 1 point above the record low last set in August.

Access to Credit: Getting a loan continues to be difficult, with a net 14 percent of those who would like to borrow saying that loans are harder to get than the last time they tried. Thirty-three percent reported regular borrowing, unchanged from September. But there is little demand for loans, since most businesses have record low plans for capital expenditures and are postponing investing in inventory.

Sales: A net negative-31 percent said sales were higher in the last three month compared to the prior three months. And a net negative-4 percent expect sales to be higher in the next three months.

NFIB Report Conclusion: What does it all add up to? While access to capital is getting lots of press, the NFIB report suggests this is not truly the biggest issue facing small business. When asked what was the single most important problem facing their business, 33 percent said ‘poor sales.’ (Most other concerns earned only single-digit percentages.) In contrast, ‘financing’ was cited as the most important problem by just 4 percent of respondents. With record low numbers of business owners planning to expand, add inventory or make capital expenditures, there’s little demand for credit.

My Advice: if you want to help, go out and buy something from a small business.

Download the full report (PDF).

For more info: Click on “Subscribe to Newsletter” and enter your email address at the tops of the page to receive notice of this weekly feature and other new articles. You may also email your Job Search related questions to

Be sure to look for me on your favorite networks:

Mark Montoya on Twitter

Mark Montoya on LinkedIn

Mark Montoya on Google+

Mark Montoya on Facebook
Please Like My Facebook Pages:

Check out some of my other Online Personal Branding Posts to Help Your Small Business or Improve Your Job Search:

Mark Montoya has been working in personal branding for more than a decade for hundreds of online and offline companies, small businesses and individual service professionals. His focus has been toward improving the way jobseekers find employment on the Internet. He has synthesized his expertise by helping job seekers obtain their ideal choice of employment over the Internet on his sites and, and through his books 101 Tips Every Job Seeker Should Know and The Ultimate Online Job Search eBook.

Learn more at, on Twitter, on LinkedIn or StumbleUpon, or Google+.

“It is the responsibility of the individual to reject the prospect of mediocrity and to strive for the betterment of society as a whole” ~ Mark Montoya

One thought on “Small Businesses: “We Need Customers, Not Loans””

Leave a Reply

Your email address will not be published. Required fields are marked *