Very small businesses are less optimistic about the economy
Optimism at the nation’s tiniest businesses appears to have diminished in December as more owners faced cash-flow problems and planned to cut spending, according to a survey by the Discover credit card company.
The monthly poll of very small companies — those with fewer than five employees — showed that 62% viewed the economy as poor, up from 59% in November. About 45% have had cash flow problems that caused them to delay paying their bills by more than 90 days, up from 43% last month.
Overall, 51% of the business owners surveyed said they thought the economy was getting worse —that’s up from 46% last month.
The drop in confidence comes after three months of gains, Discover spokesman Jon Drummond said.
“They’re not ready to declare victory over the economy yet,” Drummond said. “They’re going to keep watching some of the signs.”
Still, he said, business owners are more optimistic than they were last year.
That assessment rang true with Thea Selby, a principal at San Francisco-based Next Step Marketing. She said her company had been expecting a better year in 2010, but sales were flat.
Still, she said, some recovery among media businesses could lead to better times in 2011. The company recently hired a part-time worker, with hopes of making the job full-time next year.
“Our attitude is optimistic going into the new year,” Selby said in an e-mail.
Scott Hauge, a small-business lobbyist and the owner of an insurance brokerage firm in San Francisco, said he cut his salary in half this year. He said he felt fortunate that he could take any salary at all.
Each month Discover queries 750 randomly chosen owners of very small companies about sales, cash flow, their expectations about the economy and other issues.
