Small business bosses are feeling a little more optimistic than they were a few months ago.
But that optimism is accompanied by a deep conservatism toward expansion, and an expectation that it will take time for the economy to recover, a new Network of City Business Journals survey of 776 small business leaders in January shows.
Small business bosses are more optimistic than they were just after the election. In November, only 37 percent expected their business prospects to get a lot or a little better. In January, 63 percent expected conditions to get a lot or a little better.
"We've got some good news," says Godfrey Phillips, vice president of the City Business Journals Network, which is owned by bizjournals' parent company, American City Business Journals. Phillips is in charge of the company's small-business research efforts. "I think that optimism's up and that's surprising but it is up."
Still, just 27 percent expect to hire new employees when the economy recovers, while 39 percent expect to pay down credit lines and 34 percent intend to increase their capital reserves.
"They're just going to be more cautious," Phillips says, "sort of get themselves back on track."
And the optimism is tempered by worry.
Forty seven percent said they were very concerned about the long-term survival of their companies, up from 41 percent in November.
"I think by nature they're optimistic but there's always the realism that things aren't that good," Phillips says.
They're deeply concerned about the U.S. economy. Seventy percent say they're very concerned about the economy. That topped all other concerns, with the cost of health care coming in second at 66 percent.
And they don't expect a quick turnaround. On average, small business executives expect it will take 2.4 years for the economy to turn around.
But most do expect the economy to recover. Sixty-three percent expect the economy to regain its former strength.
"They still believe that things will come back," Phillips says. "They still believe that the U.S. economy will be strong."
To download the survey results, click here.
Triangle Business Journal, February 13, 2009.