Small Businesses Are Optimistic, Despite Hiring Challenges

May 6, 2019 Updated: May 7, 2019

WASHINGTON—Small-business owners from across the country continue to be upbeat about the U.S. economy and their enterprises’ outlook. Despite a looming labor shortage, entrepreneurs are looking to keep up their hiring spree this year.

Small businesses will continue to reinvest and hire this year, according to Chris Pilkerton, acting administrator of the U.S. Small Business Administration (SBA).

“With respect to how business will expand over the course of 2019, we see great potential and great opportunity for small businesses,” he told The Epoch Times.

After Linda McMahon left her post as administrator last month, Pilkerton has started to lead the agency in an acting capacity while the president’s nominee awaits Senate confirmation.

“The economy is strong,” Pilkerton said and small businesses “have gotten tax refunds that they’re able to put back into their business.”

For nearly 50 years, the SBA has celebrated the success stories of U.S. entrepreneurs during National Small Business Week. And this year’s National Small Business Week, held from May 5 to May 11, recognizes the achievements of small businesses.

According to Pilkerton, small businesses are an important piece of the larger economy as they contribute to the workforce by employing two out of every three net new jobs in the country.

“That’s incredibly important when you take a look at the unemployment rate, which is at a historic low, at 3.6 percent because of all of the economic policies that are in place,” he said.

Entrepreneurs Remain Upbeat

Small-business optimism has increased since President Donald Trump’s election in 2016, reaching the highest levels in decades. And according to the National Federation of Independent Business (NFIB), small businesses are creating new jobs at an all-time high and also reporting increased compensation.

Chris Pilkerton, acting administrator of U.S. Small Business Administration, at the 2019 National Small Business Week Awards Ceremony at the United States Institute of Peace in Washington on May 5, 2019. (Samira Bouaou/The Epoch Times)

“Oklahoma City area is just growing like crazy,” said Michael Van Eaton, a small business owner from Shawnee, Oklahoma, who attended the National Awards Ceremony of the Small Business Week hosted by the SBA in Washington on May 5 and 6.

“There are more concrete trucks running in Oklahoma City than there’s ever been and that’s just a direct sign that the economy is doing well,” he said.

His small family business, Van Eaton Ready Mix provides durable concrete products for everything from driveways to wind turbine foundations. The company employs about 200 people and hires more than 200 subcontractors.

Tax reform has helped Van Eaton to expand his business and hire more people.

“It grows the business, that’s the deal. I mean, we just keep pounding the money back into the business, and it makes us more efficient,” he said. “We could add another 50 people easily and we will. It has been a good year so far and a record first quarter.”

However, it is a challenge for small businesses like Van Eaton to hire people, especially at the upper management level.

“It’s competition for us,” he said, adding that hiring is key for his company’s survival.

Small Business People of the Year

This year’s Small Business Person of the Year award went to a couple from Prescott, Arizona. Jennifer Herbert and Jeff Herbert, the CEO and chief strategic officer, respectively, of a company called Superstition Meadery, received the award for creating new flavors of mead, an alcoholic beverage made by fermenting honey.

Small Business Person of the Year award recipients Jennifer Herbert, CEO, and Jeff Herbert, chief strategic officer of Superstition Meadery, from Prescott Ariz., with their awards at the U.S. Institute of Peace in Washington on May 6, 2019. (Samira Bouaou/The Epoch Times)

“We are growing as fast as we can, as fast as makes sense for our business,” Jeff Herbert said. “The SBA has certainly helped us with three loans now and that has certainly been the financial vehicle that has allowed us to experience such aggressive growth.”

The company employs 25 people and is planning to hire 50 more this year. With the help of an SBA-guaranteed loan, Superstition Meadery has bought a historic building to renovate it into a mead and food pairing restaurant, which will be first of its kind, according to Jennifer Herbert.

Mentoring Programs

The SBA supports small businesses by providing guarantees for bank loans. It also provides counseling, training, and mentorship programs throughout the country, which are mostly free.

Jeffrey Perry, a small manufacturer from Huntington Beach, California, is one of the business owners who has received support from the SBA through its Emerging Leaders initiative and SCORE mentoring programs.

“When I started my company in 2010, I actually didn’t have a plan. I just had a company and I had no idea what to do,” said Perry, who owns All Industrial Tool Supply. “Quite honestly, it was a very scary time.”

He said SBA’s mentoring program helped him understand how to build and expand his business.

“We’ve grown 30 to 40 percent every year really since day one,” he said.

Perry is optimistic about the state of the manufacturing industry in the United States.

“A lot of people read that it’s not healthy or that all manufacturing is going overseas. It’s not. In fact, we see it’s coming back. It’s very strong. I feel it’s a great place to be.”

However, hiring new people is Perry’s biggest challenge in business.

“We’re looking for talented people with a growth mindset, but it’s very challenging. It’s such a tight labor pool that we have a really hard time. You can’t just post an ad and hope that people come. It just doesn’t work that way.”

Jeffrey Perry, president of All Industrial Tool Supply from Huntington Beach, Calif., at the 2019 National Small Business Week Awards Ceremony at the United States Institute of Peace in Washington on May 6, 2019. (Samira Bouaou/The Epoch Times)

Workforce Development

Small businesses are having trouble finding suitable workers due to a growing skills gap problem. U.S. job openings surged to record high levels this year as companies struggle to find people with the talents they need.

According to the NFIB, 60 percent of small companies surveyed in March said that they were hiring or trying to hire, but 90 percent of those firms reported few or no qualified applicants for the positions they were trying to fill.

And a near-record 21 percent of small business owners reported that finding qualified workers was their top business problem.

“Right now, there’s been so many jobs that had been filled, but there’s also been a lot of jobs that had been created, and we need to find folks to fill those jobs,” said Pilkerton.

He said SBA is working with the Labor and Education Departments in developing the workforce the small businesses need.

Disaster Recovery

This year, Stephanie Vitori, owner of Cheeseburger Baby in Miami, Florida, received the Phoenix Award for Disaster Recovery.

Vitori’s burger shop was one of the many small businesses in Florida hit by Hurricane Irma in September 2017. The company’s facility and truck were nearly destroyed, bringing her business almost to an end. With the help of SBA’s disaster recovery loan, Vitori got the staff and revenue back to pre-disaster levels.

SBA’s disaster loan program is the main source of federal assistance for small-business owners. The agency provides low-interest disaster loans to businesses and residents hit by disasters to help them get back on their feet. SBA usually guarantees loans for small-business owners. However, to provide recovery support to the communities, the agency chooses to lend money directly.

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