Small business owners are smiling a little more in the current economic climate
More than half of small business owners 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 that they’re expanding opportunities for their business, up from 15 percent a year ago, but six in 10 don’t think the worst of the economic woes are over. Nearly one in six say they risk going out of business in the next six months because of the economy.
Hiring and capital investment plans are on hold, with just 23 percent of survey participants planning to hire, the lowest reading in the history of the Monitor. Only 42 percent plan on making capital investments, another record low.
Instead, businesses are taking a conservative, back-to-basics approach by concentrating on their current customers, avoiding financial risk and keeping employees happy. In order to do the latter, 35 percent of small business owners have tapped personal assets, 27 percent stopped taking a salary and 17 percent are working a second job.
Overall, the younger generation is most optimistic about the economic future. Generation Y is most likely to hire, have capital investment plans, and take financial risk, and they’re least stressed by the economy, with just 57 percent saying they’re stressed out. By comparison, Generation X is the most stressed at 72 percent, followed by the baby boomers at 71 percent.
Women also tend to be more upbeat about the future. Not only do age and gender impact one’s financial outlook, but so does geographical location, according to the survey.
Respondents in the West are the most optimistic, while respondents in the South are the least optimistic. Still, those in the south are most willing to hire and take on financial risk.
Respondents in the Northeast are most at risk of going out of business and also most likely to have cash flow issues. It’s also the area where small business owners are most likely to question their decision to become an entrepreneur.