Small business owners say they’re more confident about the economy, but they’re still plagued by worries about paying their bills and slumping cash flow, new research from Discover Financial Services shows.
Their optimism is a bit of a head-scratcher, especially considering the slew of discouraging news the survey uncovers. Some highlights:
* nearly 70 percent of small biz owners say their take-home pay has taken a hit in recent months.
* more than half say they’ve held off on bill payment because of cash flow issues in the past 3 months.
* almost 60 percent rate the economy as “poor”, and half of them said it was getting worse.
So why the optimism?
Ryan Scully, director of Discover’s business credit card, offers some context. For starters, he says the uptick in the confidence level is incremental (and a long way off its high way back in March 2007). And although only about a third of business owners think the economy is getting better, that’s up significantly from 16 percent in March.
“So we can’t say exactly what is fueling their confidence, but not all of the news they’ve been hearing is bad,” Scully told Reuters.
Interestingly, the survey found that business owners are shying away from traditional borrowing practices such as applying for a loan or getting a line of credit, possibly in favor of funding from friends and family, Scully said.
Are you more confident about the state of the economy than you were six months ago, or do you think the worst is yet to come? Tell us what you think below.
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5 comments so far
What I have found with my interactions with small business entrepreneurs is that they view themselves more like an island. The feel that they don’t see much reliable support for them but feel it is coming. It is truly becoming an exciting time for entrepreneurs.
- Posted by Jeff RyanGreat post.
Thanks
- Posted by Jason BerkesJason Berkes
I don’t know if “confident” is the word I would use, more like “less scared”. There was a real threat of total collapse of our banking system. Closer than most will realize.
I don’t think that’s a possibility anymore, not anytime soon anyway. But I’m still not convinced the worst is over. Many businesses have survived by slashing costs to keep afloat. Cutting jobs, cutting prices. That shows good management but not enough to instill “confidence” in the future. Not yet.
- Posted by joe barryI personally do not think it will get worse - how can it. I do think it will be several months before we see a turn in commercial construction. All we can do is keep swinging, work harder for less, and try to maintain our customers and employees. I am still very scared for my family and my employees’ families.
- Posted by KenWarren Buffett once said that when the tide goes out, you find out who has been swimming naked. The best way to survive a recession is to never get way out on a limb when times are good. This is how I have always run my manufacturing concern. This recession will end, times will get better, and then eventually they will get bad again. As small business people, we chart our own course. Chart it wisely!
- Posted by NJ