Survey: Owners Toughened by Recession
Entrepreneurs think the recession is making them better business owners, and, according to a recent report, they're beginning to feel cautiously optimistic.
The American Express Open small business monitor surveyed 727 owners of firms with fewer than 100 employees and found 77 percent think managing through the last few months has made them better at managing their businesses.
According to Alice Bredin, a small business advisor to American Express Open, gloomy economic circumstances have forced entrepreneurs to perform at their highest possible level, giving them more confidence as they face new challenges.
"In boom times, there's a lot of demand for services and products, so you can run an okay business and do well," Bredin said. "But when times are tough and competition increases, you have to do a great job even just to survive. Your staff has to be top-notch. You have to be careful about expenses. You have to renegotiate your lease and supplier contracts."
Optimism has also stabilized, with 4 out of 10 respondents feeling positive about their short-term prospects, even with this time last year. Retailers were the most upbeat sector, showing 47 percent with a positive outlook, on par with last fall's 48 percent. Hopeful manufacturers, on the other hand, fell from 52 to 34 percent.
"They've had several months of rough going, and so many are probably feeling they've made the tough choices and learned to survive in lean times," Bredin said.
But small business owners remain cautious. A record-low, 42 percent, plan to make capital investments in the next six months, down from 53 percent a year ago. Only 28 percent plan to hire this spring, and 30 percent have stopped taking a salary to conserve cash.
A substantial minority, 18 percent, have even taken a second job to ride out the downturn.
"I think entrepreneurs are seeing the beginning of the final days of this, and they're doing whatever they have to do to get through to the end, to find a way to stick around," Bredin said.