Most of the firms surveyed for the latest American Express OPEN® Small Business Monitor aren’t exactly what you’d call revved up about the near-term prospects for the economy. Only about one-quarter (26%) foresee expanding opportunities for their companies, and about half (44%) of these cautious optimists believe it will happen because there’s less competition. The recession clearly has taken both a financial and a psychological toll of the 763 small-business owners and managers interviewed for the Monitor, a polling exercise conducted in the fall and the spring. For example, about 1 in 6 (17%) fear going out of business in the next six months if conditions don’t improve. More than one-third (35%) say that they have dipped into personal funds to cover operating expenses. Fewer than one-quarter (23%) have hiring plans, and while the percentage of those planning capital investments is higher than that, it’s still less than half of the sample (42%) Small wonder that nearly 7 in 10 of the entrepreneurs (68%) report being “stressed out” by the recession or that almost 3 in 10 (31%) say that the economy has caused them to question the wisdom of becoming an entrepreneur in the first place. But, the portents aren’t all gloomy, and the best news, according to Amex, is that for the first time since 2007, more than half of those surveyed (55%) claimed to have a hopeful outlook for the near term even though they are beset by problems. What’s more, says Amex, these business owners “continue to do everything they can to protect their employees,” even to the extent of eliminating their own salaries (27%) or working a second job (17%). But if the responses to the Monitor are representative of small businesses in general, the kind of confidence that drives expansion and hiring among firms with fewer than 100 employees is still a long way off. For 41% of respondents, the principal challenge simply will be maintaining present sources of revenue. About the same number (45%) are seeking operating capital from outside sources. Half (49%) say they won’t take on financial risk to grow their businesses. The Monitor is conducted by professional pollsters for American Express OPEN®, a collection of products and services for small businesses. It breaks out the responses by sector, age, gender, and region. Some findings: • Those in the sector to which printers belong, manufacturing, are most likely to say that worst of the recession is not yet over (68%, vs. 64% of retailers and 56% in services). • Survey participants in the Gen-Y age group (18-28) are significantly more optimistic than Gen-Xers and Baby Boomers and are most strongly inclined to hire, expand, make capital investments, and take risks. • Women are more upbeat about business prospects than men (60% vs. 50%). • The west has the largest number of optimistic respondents (60%, vs. 54% in the north central states, 53% in the northeast, and 52% in the south).
Discussion
By Wayne Lynn on Oct 12, 2009
Patrick, Nothing here surprises me. What is most intriguing is the % who expect improving conditions because of less competition. They must not be printers. I would have thought they would be dying by the thousands by now but somehow they linger on...
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