18September 2009
Small business owners appear to be more optimistic about the economy, but there is a widening gap between the health of smaller firms. American Express OPEN Small Business monitor surveyed 763 businesses with fewer than 100 employees to gather this information.
It’s interesting that this is the first time since 2007 that most business owners (55%) feel positive about the long term future of the economy. On the other side more than two thirds feel that the worst is yet to come.
It’s estimated that as many as 17% of small businesses are on the verge of going out of business. That’s up from 11% just six months ago. One of the main problems cited was that their personal funds were tapped out. Needless to say, capital investments are not in plans for many. A recent post discusses the problem of using up personal credit lines to fund your business.
Firms are experiencing cash flow problems and many have no new plans to hire new employees. This problem is made worse because of a lack of credit availability in this economy. If owners can’t get the funds to expand their business or buy equipment that is needed, they remain flat. A lack of consumer spending is also a problem for many.
As a business coach and consultant I talk to a lot of small business owners daily and the atmosphere isn’t really good. It isn’t as bad as it was a few months ago, but there is definitely a wait and see attitude for many.