3 Things You Should Know About Small Business: Nov. 30
NEW YORK ( TheStreet) -- What's happening in small business today?
1. Business owners turn pessimistic in post-election environment. Small-business owners as a group are now the most pessimistic they have been since the third quarter of 2010, according to the latest Wells Fargo/Gallup Small Business Index .
The index fell 28 points to negative 11 in the survey conducted Nov. 12-16, including business owner concerns about their future financial situation, cash flow, capital spending and hiring over the next 12 months.
"This is an eye-opening drop in optimism and shows the level of caution that exists among small-business owners today," said Marc Bernstein, head of small business for Wells Fargo. "Business owners who navigated through the Great Recession now face more uncharted territory created by ongoing uncertainty in Washington. These owners know that potential federal government spending cuts and tax changes can create a ripple effect, hitting the pocketbooks of consumers and reducing spending that could hit small businesses hard."
Wells Fargo, together with Gallup, surveys small-business owners quarterly across the nation to gauge their perceptions of the past 12 months and expectations over the next year in six key areas: financial situation, cash flow, revenues, capital spending allocation, hiring and credit availability.
The findings include:
- About one in five small-business owners expects to lower the number of jobs at their company over the next 12 months -- the largest amount since the inception of the index in 2003.
- Despite improvements in consumer spending over the past few months, 44% of business owners said their revenues have decreased a little or a lot in the past 12 months, up from 38% in July. Looking ahead 12 months, 29% expect lower revenues, up 11 points from the prior reading and the highest percentage since the second quarter of 2009.
- One in three small-business owners expects to lower capital spending in the next 12 months. Additionally, 40% reported decreased capital spending over the past 12 months.
- The number of business owners expecting to be in a "poor" financial position over the next 12 months rose to 28%, while the percentage expecting "poor" cash flow increased to 30% -- both at their highest level since the index began in 2003.
2. Lessons from Small Business Saturday. Sunday Steinkirchner, owner of B&B Rare Books and a Forbes contributor, shares her experience with using American Express' (AXP) Small Business Saturday promotion to her advantage. Steinkirchner admits that last year's attempt to push the promotion failed because they were mimicking a larger retailer's Black Friday event, which doesn't work with a specialized small business. This year the business took a more calculated approach and with that came a 400% increase in sales. That's huge for a specialized small business like B&B Rare Books.