NEW YORK (MainStreet) -- Small business owners are generally a positive group. After all, why else would they shed so much blood, sweat and tears over a business idea if they didn’t think it would be successful?
But times are tough, and small business owners aren’t as optimistic as they’d like to be -- or as economists and politicians would like them to be – according to the American Express OPEN Small Business Monitor survey.
As a matter of act, even an optimist couldn’t muster much enthusiasm over the survey findings, which suggest that America’s army of entrepreneurs are growing increasingly less bullish over the short-term prospects of their companies.
The survey found that one-third of small business owners believe the economy is currently in recession, “based on how their own companies are performing”. If there’s any good news from the survey slice, it’s that last year Amex found that 44% of U.S. business owners thought we were in recession in 2010.
27% of business owners also say that they have no plans to hire new employees or otherwise grow their companies (that’s up from 21% from a similar survey conducted by Amex six months ago). Entrepreneurs did say that when the economy does improve, they’re less worried about coming out of it in bad shape. Other findings from the report include the following:
- 55% of business owners have credit and cash flow concerns, down from 66% in the spring of 2011.
- 48% of business owners say they are more likely to make capital investments (if they can get the credit from banks), up from 44% six months ago.
- Only 31% of business owners say they will hire new staff over the next six months (which won’t do much to boost the employment rolls), down from 35% in the spring.
- 16% of business owners report that the “morale of their employees has improved over the last six months”, a rise from 9% in late 2009.
- 34% of business owners are using personal funds to pay for business costs – up from just 2% in 2004.
All in all, it would seem entrepreneurs are hunkering down and waiting out the storm, with a sliver of hope that better times are ahead.
“The recession has made small business owners more calculating and measured in how they run their firms,” said Susan Sobbott, president of American Express OPEN, in a statement. “When cash is tight, they pull back on spending or look for creative ways to access capital; when plans for growth are unrealistic, they put them on hold until the time is more prudent.”
There’s also a sense among business owners that while times are tough, the worst of the economic news may be behind them. Only 5% are concerned about meeting payroll, and only 10% of business owners told Amex they don’t have enough cash to go out and attract new clients. Both numbers are higher than they were six months ago.
So call it a tale of two mindsets. For the short-term, small business owners are bearish on the economy. But for the long-term, the outlook is moderately better as the economy returns to form.
At least, business owners hope so.