Guest Column by Michael Alter, president and CEO of SurePayroll
As an online payroll services provider for more than 35,000 small business customers, most of whom are startups with just 1-to-10 employees, SurePayroll has been in a unique position to get a finger on the pulse of the small business economy. Since September of 2004, we’ve been surveying our customers with the SurePayroll Small Business Scorecard, a monthly look at hiring and average paycheck trends.
When we went into business in 2000, SurePayroll was also a small startup with just a few employees. We’ve grown to serve more than 35,000 small businesses across the country and are now a wholly owned subsidiary of Paychex. I think our history gives us a unique perspective on what many startups are going through.
We’re constantly learning new things from our customers and August was no different. Results from the Scorecard showed that four out of five small business owners have not sought lending in 2012. While much emphasis has been placed on the banks not loaning enough to small companies, it appears that most of those small companies and startups haven’t really been looking to borrow. For those that have, our survey indicates two out of three did not have a problem securing a loan.
These findings suggest the problem for startups in the economy right now may not be the banks, but rather an overall lack of demand. There’s just not enough confidence in future growth right now for startups to warrant borrowing and spending.
Other August results from the Scorecard show hiring down 0.1 percent and the average paycheck down 0.2 percent. Year-over-year, hiring has fallen 1.5 percent and paychecks have gone down 1.4 percent.
Frustrating as it’s been, we seem to still be in a holding pattern, particularly with the uncertainty of a presidential election hanging over us.
What creative startups have been able to do, and we’ve seen this verified in previous data from our Scorecard, is leverage technology to be more productive with fewer employees and increase their margins. Businesses have still been able to grow revenues with increased productivity, which is great, however it still leaves us lagging on the jobs front.
SurePayroll is a wholly owned subsidiary of Paychex, providing an easy, online, convenient payroll service that keeps our more than 35,000 small business customers in control. SurePayroll also offers efficient online solutions for managing 401(k) plans, health insurance, workers’ compensation, employee screening and more. For more, visit www.SurePayroll.com or follow SurePayroll on Twitter @SurePayroll.
As President and CEO, Michael Alter is responsible for the overall business model development, strategic planning and day-to-day operations for SurePayroll, a wholly owned subsidiary of Paychex. Alter joined SurePayroll in 2000 after more than five years with McKinsey and Company, where he was a founder and leader of its Service Operations Practice. Prior to receiving his MBA from the Harvard Business School, Alter worked in various sales positions at IBM. He holds a bachelor’s degree in economics from Northwestern University. Follow Michael on Twitter @MichaelAlter.