Gulf Spill Taking Toll on Small Businesses
A quarter of small businesses nationally say the Gulf oil spill will impact their business, according to a new survey.
Capital One's Small Business Barometer, as the quarterly poll is called, was conducted in July among some 2,000 businesses with less than $10 million in annual revenue.
Though just 11 percent of small firms say business has dipped since the spill, business owners think the disaster will cast a long shadow. Besides the 25 percent who say it will have a "moderate to significant impact" on their business, another 17 percent say it's too early to say. Eight percent say business has actually improved since the spill. (Read about how small businesses are helping with the spill.)
The survey also suggests business is stabilizing for many small firms and even picking up, though most owners are less optimistic than they were three months ago. Barely a third (32 percent) said economic conditions for their business were improving, compared to 39 percent in the first quarter. Just over 40 percent said conditions had stabilized, and nearly a quarter (23 percent) said conditions had gotten worse.
"Survey results for the second quarter of this year suggest that financial performance has stabilized or even started to improve for most small businesses surveyed in the U.S., continuing a trend we first observed in the first quarter," said Robert M. Kottler, Capital One's executive vice president of small business banking, in a statement. "However, compared to results from the first quarter, small businesses are slightly less optimistic about economic conditions and an increased number of small businesses plan to hold off on capital investment and job growth plans for the next six months."
Other findings: One in five small businesses say they are worse off financially than they were a year ago. That's down from 36 percent in 2009's second quarter survey. Just over a third (37 percent) said they were better off than they were a year ago – up 12 percentage points from last year.
Though finances have stabilized or improved for some 75 percent of small businesses, most are planning to hold off on investments and hiring. Just over a quarter (26 percent) say they'll be hiring in the next six months – down from 32 percent last quarter.
Inc. contributing editor Courtney Rubin was for five years a London-based staff writer for People magazine. Rubin, a former senior writer for Washingtonian magazine, has written for the New York Times magazine, Time, Marie Claire, and other publications. She is the author of The Weight-Loss Diaries.