Small Business Outlook Plunges to Lowest Level in 9 Months

DiscoverPlagued by cash flow issues and a gloomier economic outlook, Discover Business Card’s index of how small businesses are faring fell 12 points in November, its lowest level in nine months. 
Discover’s Small Business Watch index dropped to 76.5, from 88.5 in October. The November 2008 index of 67.5 is the lowest point recorded for the Watch.
The index “saw drops in optimism across the board, so it’s hardly just one factor causing the concern,” said Ryan Scully, director of Discover’s business credit card.
The Watch index is based on a national random survey of 750 small business owners. It is commissioned by Discover Business Card and is conducted by Rasmussen Reports, an independent survey research firm. The numeric index is calculated by assigning values to responses to a set of six consistent questions. The base value of the Watch was established at 100.0, based on surveys conducted in August 2006.
According to the Rasmussen results, small business owners see little hope for the holiday season. Only 11 percent expect to see more sales this year over last, while 46 percent of them are expecting less business than last year.  That’s an increase of about 40 percent who said the same in November 2008.
About 39 percent anticipate 2009 sales will be about the same as last year, and 4 percent weren’t sure.
The U.S. small business owners surveyed by Rasmussen have less than five employees, a segment that consists of 22 million businesses producing more than a trillion dollars in annual receipts, Discover said.
Here are highlights of the survey for November:

  • 52 percent of owners say they have experienced cash flow issues in the past 90 days, up from 44 percent in October.
  • 53 percent of small business owners see conditions getting worse in the next six months, up from 43 percent in October
  • 62 percent of small business owners rate the economy as poor, an increase from 55 percent in October
  • 53 percent of small business owners think the overall economy is getting worse, up from 44 percent in October but still significantly lower than the 69 percent of owners who felt that way in February 2009
  • Only 11 percent of small businesses are expecting increased sales this year

See Today’s Featured Credit Card Offers

Leave a Reply

Your email address will not be published. Required fields are marked *