More than half (55%) of entrepreneurs have an optimistic outlook on near-term business prospects, up from 45% in March 2009, according to the American Express OPEN® Small Business Monitor, a semi-annual survey of business owners. One quarter (26%) report expanding opportunities for their business, up from 15% from a year ago, but six in ten (63%) do not think the worst of the U.S. economic woes are over, and nearly one in six (17%) say they risk going out of business in the next six months because of the economy. (Download the Fall 2009 Small Business Monitor)
“We see two clear stories being told by business owners. Many small businesses are seeing signs of improvement, yet other firms are still struggling to keep their enterprise afloat” said Susan Sobbott, president American Express OPEN. “For the first time since 2007, the majority of small businesses are optimistic about the near-term future. However, some firms are dipping into cash reserves and personal assets to stem the tide of declining sales.”
Among those businesses reporting growth opportunities for their firms, 44% say these opportunities come as a result of less competition. The ability to renegotiate equipment leases and supply contracts (13%) and lower real estate costs (12%) also contributed to these firms’ growth mindset. Overall, when asked for the primary way they address cash flow issues, 32% of business owners said they use personal or private funds, up 9 percentage points from March. More than a third (35%) say the recession has caused them to tap personal assets, on-par with the March
Although small business optimism is on the upswing after hitting its all-time low a year ago, the American Express OPEN Small Business Monitor shows that business are not shifting to hiring mode. This fall, just under one quarter have plans to hire (23% vs. 28% this spring), which is the lowest reading in the history of the Monitor (falling below the fall 2002 recession level of 26%), and plans for capital investments equal the record setting low from Spring 2009 (42%).
With hiring and capital investment plans on hold for most, business owners are taking a conservative, back-to-basics approach to managing their firms... Read more.