By Rieva Lesonsky
The latest American Express OPEN® Small Business Monitor survey is out, and there’s lots of news. First, the good news:
More than half (55 percent) of entrepreneurs have an optimistic outlook about their short-term business prospects, an increase from the 45 percent who were optimistic in March 2009, when the last survey was done.
One-fourth (26 percent) of those surveyed said opportunities for their business are expanding, up from 15 percent a year ago.
But there’s also bad news:
Six in 10 (63 percent) say the worst of the recession is not over.
Nearly one in six (17 percent) are worried they will go out of business in the next six months.
Of the businesses who foresee growth opportunities, 44 percent say the opportunities are due to decreased competition; 13 percent say they are due to the ability to renegotiate leases and supply contracts; and 12 percent say they are due to decreased real estate costs
While optimism is bouncing back from its all-time low one year ago, there are still plenty of clouds on the horizon. Thirty-two percent of those surveyed said they are using personal funds to handle cash-flow problems, a 9 percent increase from March. In addition, 27 percent have stopped paying themselves a salary and 17 percent have taken a second job.
The survey reveals small-business owners are in survival mode, rather than growth mode. Forty-one percent of those surveyed said their focus for the next six months will be maintaining current sources of income; just 26 percent are focused on growth—the lowest number in the history of the Monitor survey. In addition, 49 percent are unwilling to take on more financial risk to expand their businesses—a record high for the survey.
Plans to hire have decreased from March 2009, with just 23 percent of those surveyed planning to hire in the next six months. Instead, entrepreneurs are focusing on keeping their existing employees happy.
As they struggle to maintain their staffs, find sources of income and keep their heads above water, it’s no wonder that 68 percent of those surveyed report being “stressed out” by the economy; in fact, 31 percent say the recession has made them question their decision to become an entrepreneur.
How do these points of view agree with your own? You can read lots more from the Monitor here: