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8/12/2010
01:15 PM
Michele Warren
Michele Warren
Commentary
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SMB Surveys Reveal Mixed Results

There's certainly no shortage of polls and surveys aimed at gauging how SMBs are feeling about the economy, and about how it might affect their businesses. Here are some results from two of the latest reports.

There's certainly no shortage of polls and surveys aimed at gauging how SMBs are feeling about the economy, and about how it might affect their businesses. Here are some results from two of the latest reports.According to Vistage International's CEO Confidence Index, the employment outlook is improving and SMBs are reporting slow gains in revenue and profit. Of the 1,600 SMB CEOs who participated in the survey, 44% said they plan to expand their workforce in the next 12 months. Two-thirds expect company revenue to grow, up from one-half of executives a year ago.

"CEOs of small and medium-size businesses have adjusted to the lean economy, are doing more with less, and have positioned their companies for success," said Rafael Pastor, chairman and CEO of Vistage. "Their continued confidence sends a strong message that [SMBs] will be among those who will lead our overall economic recovery."

But there are still a few issues nagging at SMBs, one of which is the federal government's not understanding the challenges they face. Surveyed CEOs expressed concern about increased taxes, regulations, and government intrusions that "hinder entrepreneurship."

The issue of taxes, in fact, was allegedly a contributing factor to a decline reported by the National Federation of Independent Businesses in its Index of Small Business Optimism. That index dropped 0.9 points in July and reached 88.1 after a sharp decline in June. The Index has been below 93 every month since January 2008 (that's 31 months straight) and below 90 for 24 of those months. According to the "NFIB Small Business Economic Trends" report published this month, the "persistence of Index readings below 90 is unprecedented in survey history."

On the whole, this survey paints a far less rosy picture of the SMB space in terms of attitudes and expectations. Over the next three months, 9% of small businesses plan to do more hiring, while 10% plan to reduce their workforces, making for a seasonally adjusted net 2% of owners who plan to create more jobs. The percentage of owners planning to make capital expenditures over the next few months fell 1 point to 18%, only 2 points above the 35-year record low. In the meantime, small-business owners continue to cut prices and liquidate inventories, with weak sales providing little incentive to restock.

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