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Editor's Comment: Optimism Grows for Small Business Owners

September 1, 2009 By: Esther Durkalski Hertzfeld Paperboard Packaging


More than half (55 percent) of entrepreneurs have an optimistic outlook on near-term business prospects, up from 45 percent in March 2009, according to the American Express OPEN® Small Business Monitor, a semi-annual survey of business owners. Twenty-six percent report expanding opportunities for their business, up from 15 percent from a year ago, but 63 percent do not think the worst of the U.S. economic woes are over and 17 percent say they risk going out of business in the next six months because of the economy.

Esther Hertzfeld
Esther Hertzfeld

Unfortunately, among those businesses reporting growth opportunities for their firms, 44 percent say these opportunities come as a result of less competition. The ability to renegotiate equipment leases and supply contracts (13 percent) and lower real estate costs (12 percent) also contributed to these firms' growth mindset.

Overall, when asked for the primary way they address cash flow issues, 32 percent of business owners said they use personal or private funds, up 9 percentage points from the March Small Business Monitor. More than a third (35 percent) say the recession has caused them to tap personal assets.

With hiring and capital investment plans on hold for most, business owners are taking a conservative, back-to-basics approach to managing their companies:

  • 1. Concentrating on current customers. Forty-one percent of small business owners say their top priority over the next six months is maintaining current sources of revenue. By comparison, only one quarter say they are focused on growing their business, which is the lowest number for growth in Monitor history.
  • 2. Avoiding risk. Half say they are not willing to take on financial risk to grow their business, an all-time high for the Monitor.
n Keeping employees happy. In general, deteriorating employee morale has plateaued. Only twelve percent say employee morale has worsened over the last six months (down from 25 percent for the preceding six-month period.) Three-quarters say morale has stayed the same, and nine percent say it has improved. In addition, 28 percent of business owners see offering financial incentives such as bonuses and paid time off as a way to increase employee morale.

 
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