The September survey shows a slight improvement in owners' optimism. Granted, the index is still very near its all-time low, but small-business owners see some hope over the longer term.
"The gain in the index clearly signals that the worst is likely over, but so far there has been no surge in sentiment as many components still remain at historically low levels," said William Dunkelberg, NFIB's chief economist.
"The small-business sector has taken a real beating over the last year, but owners are seeing some upward movement in both sales and earnings."
The anecdotal evidence I can add to this from my own interactions with small-business people is that since they have "made it through the worst and survived," they see hope for the future.
One thing that should give us pause when we read surveys like this, though, is that entrepreneurs are by their very nature an optimistic lot. My father always told me, "When you look at an entrepreneur's forecast, double the costs and triple the time, and you will probably be closer to the truth."
And remember the old story of how we can spot a budding young entrepreneur — he is the one who on Christmas morning can be found digging in a pile of manure in his backyard exclaiming, "I just know that pony I asked Santa for is in here, if I just dig deep enough."
So, how can policymakers help entrepreneurs realize their goals?
Here is a three-part plan that would help turn the optimism of American entrepreneurs into real economic growth and create jobs:
Cut tax rates. Entrepreneurs need to see that their risk-taking can lead to the opportunity for income and wealth down the road. But with talk of higher marginal tax rates, entrepreneurs are growing concerned that they will keep much less of the fruits of their labors and personal investments in their businesses. Increasing income tax rates has been shown in studies around the globe to put a damper on new business formation and growth.
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