Small businesses are confident that bleak economic conditions will pass without their being adversely affected by the economic downturn, according to a new study of 250 small-business owners. Or, at the very least, they're keeping a stiff upper lip about the downturn and the prospects for a speedy recovery.
A survey from Opinion Research Corporation, a market-research firm, found that there was a general feeling among small businesses that the economy is in rough shape, but there was near-unanimous agreement that future prospects were bright.
Wayne Russum, senior vice president at Opinion Research, said that nearly two-thirds of the small businesses interviewed felt that current economic conditions were having a negative effect on their businesses. "The current economic crisis is not just hitting big business," he said. "It is having a strong negative impact on the entrepreneurs whose unique contributions have a significant impact on our overall economic success."
This Too Shall Pass
Even though six in 10 businesses felt that the nation's current economic woes were negatively impacting their business, respondents were certain that bad times would pass quickly, with 88 percent saying they felt their businesses would do well in the future. And, as Russum pointed out, if almost 60 percent are seeing problems arising from the weak economy, more than a third of respondents are not.
Small professional-services companies that include IT-based businesses were "the most optimistic group" about the future of their businesses, Russum told us, noting that some 40 percent of this group saw the economic downturn "as having no impact on their specific business." Russum saw a "bright spot" among the small businesses surveyed, noting that restaurants, gas stations and grocery stores seemed to be doing remarkably well.
He added that other sectors were taking a more serious beating. "The findings emphasize that the current economic weakness has clearly moved beyond Wall Street and is hitting Main Street -- taking a toll on small businesses in the hard-hit manufacturing and construction sectors," he said.
Confidence in the Future
The study showed that only a small percentage of the respondents saw the current conditions as the start of a serious recession, although about half of those expected it to last more than a year. Russum noted that the small-business community remained more bullish on the state of the economy than the general public, with only 23 percent of the former group believing that the economy is "very poor," compared to 40 percent of the public at large. "People on the ground who are closest to the real workings are seeing that it's rough, but it'll turn around," he told us.
Russum was surprised at the optimism expressed by the respondents. "I was expecting a more pessimistic read on the future, and in the larger businesses that seems to be a recurring theme lately," he said.