The State of Small Business at Midyear: Wary But Hopeful
Small-business sentiment is an especially popular subject. With regular surveys of small-business owners being conducted by financial institutions and professional associations, it's relatively easy to make generalizations about this crucial segment of the U.S. economy. But doing so can also be misleading.
Take a look through the most recent research on small-business confidence and some common themes come through: Owners are feeling better than they did two or three years ago, they're worried about the health of the U.S. economy and reluctant to take risks.
Look at certain numbers and you can make a strong case things are getting better. Consider other measures, and you can proclaim the business climate remains dismal. Whether things are "good" or "bad" for small companies depends in large part on context.
If you want to put a positive spin on things, consider a recent survey of 3,000 business owners conducted by Minneapolis-based U.S. Bank(USB) . Almost 70% described their company's financial health as "good," "very good" or "excellent." Asked to name their biggest concern, most said general economic uncertainty; the second-most popular answer, "poor sales," was cited by only 12% of owners.
These findings are consistent with a 2011 year-end survey by the National Small Business Association, which found that 75% of small-business owners were confident about the future of their business, even though only 20% believed the overall economy would grow in 2012.
The most recent Index of Small Business Optimism, released monthly by the National Federation of Independent Businesses, found that overall, optimism levels for the first half of 2012 are the highest they've been since late 2007. But the future doesn't look particularly bright: only 7% of owners think the next three months will be a good time to expand.