Confidence and optimism drive the small business owner to invest in advance of profits and hire in advance of revenues.
By Daniel at 31 December, 2009, 12:12 pm
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Today, the vast majority of small, new and start up business owners are fearful and pessimistic. They fear the cascading risks and malicious regulation of Wash Dc, the cheating and fraud of Wall St and the lying and mendacity of the MSM.
They are pessimistic about their economic, social and political prospects and feel disenfranchised.
Preservation of capital and cash conservation are prime motivators for the small business owner. As small business is compressed and penalized, so Main St is demoralized and impoverished. As Main St goes, so goes much of the middle class. No middle class recovery is in sight. Therefore, no sustainable recovery is visible for the Productive Economy where a majority of Americans still work and live.
There is also ample evidence of our pool of small businesses SHRINKING rather than growing. Government at all levels is loading down that shrinking base with layer after layer of new and abusive regulation and taxation.
Looking to Government to become part of the solution, rather than the primary source of the problem, is unrealistic.
Many small businesses are in bunker mode, seeking to survive until some exit strategy can be developed.
o The number of small business owners who think the economy is getting worse was down to 49 percent from 53 percent in November; while 24 percent of small business owners see the economy staying the same, up from 16 percent in November; 25 percent see the economy getting better, down from 28 percent in November; and 2 percent are not sure.
o 22 percent see conditions for their own businesses getting better in the next six months, an improvement from 19 percent in November; but still in contrast to the 52 percent who see conditions getting worse, 24 percent who see things staying the same, and 3 percent who aren’t sure.
o 35 percent rate the current economy as fair, up from 30 percent in November; while 61 percent rate it as poor, and 4 percent rate it as good or excellent.
o 18 percent of owners say they will increase spending on business development activities such as advertising, inventories and capital expenditures in the next six months, 26 percent will make no changes, 51 percent plan to decrease spending, and 5 percent are not sure.
o 51 percent of owners have experienced cash flow issues in the past 90 days, down one percentage point from last month; 45 percent of owners have not experienced cash flow issues, and 4 percent aren’t sure.
- David Goldman
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