Small business owners are signaling confidence in their own businesses despite their belief that the economic recession will continue into 2011, according to results of the 2010 U.S. Bank Small Business Annual Survey. The survey also revealed common characteristics of small business owners today, who demonstrate resilience, motivation and ingenuity.
The survey found small business owners uniformly agree that the U.S. economy is in a recession, but have a slightly more positive outlook on the business conditions in their local markets.
Specifically, nine of 10 small business owners feel the economy is currently in a recession, and nearly eight of 10 feel the United States will still be in a recession next year. When asked about the conditions in their state for small businesses, three of 10 feel their state is better than the rest of the country. Overall, 89 percent believe the economy is still in a recession, 75 percent think the economy will still be in a recession in 2011, and 32 percent feel their state has better conditions for small businesses than the rest of the country.
“The results prove a truth we all embrace, that American small business owners are resilient and they are survivors,” said Rick Hartnack, vice chairman at U.S. Bancorp and head of consumer banking. “There is no question that this sector will be central to our economic recovery. Taking the time to listen to their perspective and understand what motivates them is essential to providing the financial, legislative and moral support they need to thrive.”
Despite the current economic climate, most remain confident in their own company’s ability to weather the storm. At the same time, over half of small business owners felt this is not a good time to start a business. Poor sales were cited most frequently as the biggest challenge facing their business today, though 56 percent reported revenue in line or higher than last year, 47 percent expected revenue to be higher next year, and 63 percent said their company is financially healthy.
In the past, over four in 10 have faced and survived a crisis that significantly impacted cash flow and nearly destroyed their business. The most commonly cited reason was because they lost their biggest client. For the future, over half feel health care reform will negatively impact small businesses. In addition to these challenges, about half agree that owning a small business can be lonely. According to survey results, 44 percent survived a serious financial crisis, 37 percent have faced a crisis because they lost their biggest client, and 55 percent believe health care reform will negatively impact their business.