Small Business is Shoring Up the Ailing Economy

SUSIE GHARIB: If you want to know the outlook for the economy, think small.
Small business has been the engine of job creation over the past 17 years,
generating 65 percent of net new jobs. Erika Miller gets the outlook for hiring, and begins at a small business in Manhattan.

UNIDENTIFIED FEMALE: Six weeks ago, we just added an engineer. And
we are also looking for more people. As of right now, we are looking for a
marketing and sales coordinator, and we are also looking for salespeople.

MILLER: Jennifer Walzer is the owner of Back Up My Info!, BUMI
for short. Her eight-person company helps other companies avoid data

UNIDENTIFIED FEMALE: We provide a completely automated and very
secure off-site data backup and recovery service. And the chances that
your servers are going to crash is 100 percent guaranteed, it’s just a
matter of when. And when it happens, you have one shot to do a restore.

MILLER: She’s not the only small business owner hiring lately.
According to a National Federation of Independent Business survey, 12
percent of small businesses added workers in the past few months, 14
percent cut jobs, the rest held steady. Economists have been waiting for small businesses to step up hiring, with the hopes of lowering the nation’s high unemployment rate.
Unfortunately, the latest feedback from small firms is not encouraging.

According to the NFIB, the net percentage of small businesses planning
to hire is 4 percent, the third straight monthly drop. Many firms can’t
justify taking on an extra employee until they see a bigger pick-up in
revenues. Others are relying on existing workers to work extra shifts, or
using technology to enhance productivity.
But it may be bigger than that.

UNIDENTIFIED MALE: They’re not that comfortable that the future is
going in the right direction, and that has a direct bearing on their desire
or willingness to commit to hiring.

John Krubski is an adviser to small businesses, and he thinks the
fact that it’s a presidential election year is increasing anxieties. But
he also says many firms simply don’t want to grow in size.

UNIDENTIFIED MALE: There’s an interesting thing that happens to a
company as it grows in size. When the business grows too big, they’re no
longer having any fun. And it’s interesting, because when you talk to
small business owners, having fun, that is to say, really enjoying the
business, it’s a big component.

MILLER: So what’s stopping the firms that want to hire from doing so?
A common problem is finding suitable applicants.

UNIDENTIFIED MALE: In our job descriptions, we always state when we
post ads that we are looking for a cover letter. “Why do you want to be
with us? Why do you want to join our team?” And about 99 percent of the
resumes that come in don’t come in with a cover letter.

MILLER: So, ironically, most resumes end up deleted by a firm that
wants nothing more than to save your info. Erika Miller, NIGHTLY BUSINESS REPORT, New York.

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