Economic uncertainty is high among small-business owners, but there is some improvement in their outlook, according to the latest American Express OPEN Small Business Monitor. New York’s small business owners are more hopeful about their companies’ prospects than they were in the spring, according to a recently released survey. The result is up from 38 percent who had such an outlook in the spring. A biannual survey on the economic outlook, which began in 2003, show a decline in owners’ expectations for sales and profits as the lackluster economic recovery struggles to gain steam.
September was another month of low expectations and pessimism for the small-business community, with the NFIB Small Business Optimism Index losing 0.1 points and falling to 92.8. The federal government’s Small Business Administration frequently redefines size standards for what constitutes small businesses for many of the industries SBA monitors, increasing numbers mostly to get more businesses eligible for loans and other services. While a majority (59 percent) are feeling stressed out by the economy, this percentage is down from last spring, when nearly two-thirds (64 percent) expressed this attitude.
Small business owners in New York have roughly the same projections as owners across the nation, where 49 percent are optimistic. But they trailed business owners in the Northeast — defined in the survey as Maine, Vermont, New Hampshire, Massachusetts, Rhode Island, Connecticut, New York, Pennsylvania, and New Jersey — where 58 percent of proprietors profess a positive outlook. About one out of two (48 percent) owners say they are currently “worse off” compared to 2007, when the recession officially began, while only 26 percent claim they are “better off.”
The outlook for expansion did improve slightly; those who view the current period as a “good time to expand” gained three points, and the number of owners expecting business conditions to be better in six months gained four points, landing at a net two percent. Nearly one-third (32 percent) of the surveyed 839 small business owners/managers of companies with fewer than 100 employees said that job one is maintaining their current business and sources of revenue. More than half of New York’s small business owners, 55 percent, expect to make capital investments in six months. That’s up from 47 percent this spring. The survey, which gauges the mood and sentiment of small and medium sized business owners, found that only 46 percent expect their sales to increase in the next six months, significantly lower than last spring (58 percent).
September was another month of low expectations and pessimism for the small-business community, with the NFIB Small Business Optimism Index losing 0.1 points and falling to 92.8. The recession-level reading was pulled down by a deterioration in labor market indicators, with job creation plans plunging six points, job openings falling one point and more firms reporting decreases in employment than those reporting increases in employment.
The survey found:
· High Achievers take more risks: More than two-thirds have increased their appetite for risk compared to one year ago (67 percent vs.35 percent of the total population)
· Growth is a priority: Ninety-three percent (vs. 69 percent overall) are planning to grow their businesses over the next six months, while just over half (51 percent) list growth as their top priority (versus 31 percent overall)
· They invest in their business: More than three-quarters (78 percent) are planning to make capital investments
· They provide incentives to customers to get repeat business
· They leverage social media
Echo Research conducted the survey by telephone between Aug. 23 and Sept. 21, and American Express OPEN released it Oct. 18. Surveyors sampled 839 company managers and owners nationwide, giving the survey a margin of error of plus or minus 3.4 percent.
Other small business findings
The country appears to be losing optimism. Six in 10 (57 percent) are now pessimistic about the national economy over the next six months, up from just 43 percent in the spring. Seven out of 10 (69 percent) are pessimistic about the global economy over the same period.