Jan Norman
The Orange County Register
October 25, 2004

U.S. small businesses are adding workers, but annual salaries are lower, according to SurePayroll, a major online payroll services provider. The third-quarter data are based on the company's survey of more than 13,000 small businesses.

At the end of September, the average company surveyed nationwide had 5.6 employees, up almost 1 percent from the second quarter.

In the West, companies averaged 5.7 employees, up almost 2 percent from the second quarter and up 4.6 percent this year.

"While it's nice to see quarter-over-quarter improvement, the data suggests we've got a slow-motion recovery on our hands," said Michael Alter, president of SurePayroll.

"The pace of growth is a bit concerning. Small business is usually a major driver of economic recovery. If the small-business recovery stalls out, it's likely that the overall economic recovery will stall as well."

The average salary nationwide paid by small businesses was $29,724, down 2 percent from the second quarter.

Small businesses tend to be the first employer for inexperienced workers. This salary decline might indicate that small firms are bringing more first-time workers into the job market.

A separate survey by the American Express 2004 OPEN Small Business Monitor found that small-business owners are optimistic about growth but cautious about hiring.

Three-quarters of the businesses surveyed see growth opportunities within the next six months, about the same as a year ago and up from 64 percent who saw such growth in Oct. 2002.

As far as hiring plans, 35 percent of businesses expect to add workers within the next six months, about the same as a year ago and up from 26 percent in 2002.

About 61 percent will make capital purchases, the same percentage as last year. Their shopping list includes computer hardware, 34 percent; software and software licenses, 29 percent; office equipment, 21 percent; and real estate investments, 14 percent.

Riverside summit focuses on veterans

Business opportunities for military veterans are the focus of the Veterans Economic & Business Development Summit from 7:30 a.m. to 1 p.m. Nov. 3 at the UC Riverside Extension Center, 1200 University Ave., Riverside.

Scott Denniston, director of the Office of Small and Disadvantaged Business Utilization at the Department of Veterans Affairs, will be the keynote speaker at the annual event, sponsored by the Procurement Assistance Center of the Riverside Community College District.

Copyright © 2004. The Orange County Register.