One of the only key measurements to show any significant change from September is the likelihood of investing in business development in the next six months in areas such as advertising and capital expenditures. On the positive side, the number of those who said they plan to decrease spending dropped from 50 percent in September to 44 percent in October. However, the number of those planning no changes jumped from 22 percent to 32 percent. Those who are planning to increase spending dropped from 25 percent to 23 percent.
"This could indicate that any significant expansion and investment in the small business sector isn’t likely to arrive for quite a while," Scully said. "They’re holding on to their money."
October Highlights:
- 55 percent of small business owners rate the economy as poor, up from 53 percent in September and 48 percent in August; 36 percent rate it as fair and only 8 percent say it is excellent or good.
- 44 percent of small business owners think the economy is getting worse, down from 46 percent in September; 35 percent of owners say the economy is getting better, up from 33 percent in September.
- 44 percent of owners say they have experienced cash flow issues in the past 90 days, down from 46 percent in September.
- 29 percent of small business owners see economic conditions for their businesses improving, unchanged from September, while 43 percent see their own conditions getting worse, down two percentage points over last month.
Majority of Owners Say Small Businesses Will Lead U.S. Recovery
When asked whether small businesses will lead the U.S. economy to recovery or trail it, 53 percent say the sector will be out front, 29 percent say following the recovery is more likely, and 18 percent aren’t sure.
As for when that might happen, half of all owners say that it will be more than 12 months before most people feel that the economy has stabilized, 28 percent say it will take six to 12 months, 13 percent say it could take less than six months, and 9 percent weren’t sure.
Sixty-nine percent of owners say that the current economic climate has hurt their business. Of this group, 43 percent say it will be more than 12 months before their businesses rebound, 24 percent say it will take six to 12 months, 13 percent think that they’ll be on safe ground in less than six months, and 20 percent couldn’t venture a guess.
6 in 10 Small Business Owners Are Likely to Tap Personal Assets to Stay Afloat
Forty percent of small business owners say it is “very likely” that they will need to borrow from their personal assets over the next 12 months in order to stay in business, while 21 percent say that it is “somewhat likely,” 34 percent say it is “not very likely” or “not at all likely” they will take similar measures, and 4 percent weren’t sure.
At the same time, most small business owners say they do not plan to ask friends and family for financial support: 67 percent of owners say that it is “not very likely” or “not at all likely” they will ask loved ones for money, and 31 percent say it is “very likely” or “somewhat likely” they will borrow from friends and relatives.
SBA Loans Remain Unpopular
Small business owners are also clearly not interested in Small Business Administration loans. Ninety percent of owners say that they have never applied for an SBA loan. When presented with a list of several reasons why not, 48 percent say that they did not need an SBA loan, 15 percent say they are unfamiliar with the programs, 14 percent say they received funding from another source, 9 percent say it takes too much time, 9 percent say they would rather use their personal assets, and 6 percent say they have some other reason or are not sure.
Competition Takes Its Toll
When asked about the competitive landscape, a majority, 56 percent, of small business owners say competition stayed about the same in the past six months, while 25 percent say it increased, and 18 percent say it decreased.
Of those that have experienced increased competition in the past six months, 61 percent say that their sales have been hurt by it, 14 percent say it has helped sales, 18 percent said it had no impact and 4 percent weren’t sure.
Among those who have experienced less competition in the past six months, 47 percent say that they have seen no impact to their sales, 26 percent say that it has helped sales, 24 percent say it has hurt their sales, and 4 percent weren’t sure.
Biggest Issue Facing Small Businesses
When asked to select the biggest issue facing their businesses right now from a list of possibilities, small business owners chose the following:
- Sales generation, 28 percent
- Taxes, 22 percent
- Operating costs, 15 percent
- Health insurance, 10 percent
- Access to capital, 5 percent
- Inflation, 4 percent
- Some other issue, 6 percent
- Not sure, 10 percent
