Barely two months since Governor Edmund G. Brown issued a statement proclaiming that the month of May was California’s small businesses month, as well as reaffirming the commitments his office has put in place to support small businesses, things seem not to work in favor of his statements.
According to recent research done by California Bank and Trust, 81.8 percent of the small business persons interviewed said that the economic environment in California provides more challenges than opportunities. The financial challenges troubling most of these small entrepreneurs circumnavigate along cash flows and revenues. Here are some of the issues that are continuously making the financial status of California’s small businesses uncertain and a daily nightmare.
Managing Cash and Revenue: This is one of the things that ranked high among the concerns raised by small business operators in California. Economic uncertainty came second while employee hiring and retention took third position. This, therefore, means that financial institutions and other government agencies should step in to offer cash management education to these small business persons.
Hiring and Retaining Employees: 66 percent of the respondents have no plans to increase the number of their employees in this year 2013. Out of the 66 percent, 40.2 percent are not in a position to hire new employees due to economic reasons.
Capital: Most of California small business operators have financial problems, especially capital. 46.3 percent of those interviewed by California Bank and Trust expressed their need to expand their capital base. Most of them seem to be dependent on their relationship with their banks for tips on success in business and for the financial assistance they need. Amid all these economic challenges, it is encouraging that a good number, 81.4 percent, have good relationships with their respective financial institutions and see the relationship as either very important or somewhat important to their businesses.
Economic uncertainty has far-reaching challenges that limit the extent to which small businesses can go. Financial institutions, government, and the small business persons in California should work together in order to overcome these challenges. Good business policies can also help.