Small Business Owners See Conditions for Their Businesses
Improving, Rate the Overall Economy Better
NETWORKING: Small Business Owners Continue Slow Crawl onto Web:
Social Networking Increases Over Last Year, 21% More Small Businesses
Have Web Sites
RIVERWOODS, Ill., Apr 26, 2010 (BUSINESS WIRE) --Small business confidence jumped 9.4 points from March to April,
bringing the measure of small business confidence back to where it was
at the start of the year, according to the Discover(R)
Small Business WatchSM. The index rose to 85.1, up from
75.7. A similar jump occurred last year when the index gained 10.3
points from March to April.
"Small business owners are more positive this month about where the
current economy stands and where it appears to be heading," said Ryan
Scully, director of Discover's business
credit card, who commissions the monthly survey. "The percentage of
owners who rate the economy good or excellent is the highest it has been
since August 2008 - just weeks before the collapse of the financial
April results show a surge in the number of small business owners who
say economic conditions for their own businesses are getting better: 30
percent of them say the climate will improve in the next six months,
compared to only 20 percent in March. Of the remaining respondents; 48
percent say the climate is getting worse, but that number is down from
53 percent in March.
When asked about their intentions to invest in their businesses, 23
percent say they would increase spending, up from 18 percent in March,
while 43 percent still plan to decrease spending, which is down from 52
percent in March; 31 percent say they will make no changes.
Other April Confidence Indicators:
Small business owners who say the current economy is good or excellent
was 13 percent in April, up from 7 percent in March and the highest it
has been in 20 months; 29 percent rate the economy as fair, and 57
percent think it's poor.
The outlook for the direction of the economy improved: 31 percent say
it is getting better, up from 22 percent in March; while 52 percent
say it's getting worse, down from 58 percent the prior month; and 14
percent aren't sure.
Cash flow issues eased slightly: Fewer owners said their businesses
encountered temporary cash flow issues in the past 90 days that caused
them to hold off on paying some bills: 51 percent said they did not
experience cash flow issues in April, compared with 47 percent in
March. Those owners who had cash flow issues dropped from 46 percent
in March to 45 percent in April.
POLL: Social Networking Continues to Grow
Small Business Watch surveys since 2007 have shown an increasing number
of small businesses using the Internet to sustain and grow their
"Social networking for business purposes is growing," Scully said. "With
such small operations, small business owners don't need a long time to
tell whether something is good or bad for business, so the social
networking numbers will be the ones to watch."
In 2007, 22 percent of small business owners told the Watch that they
were members of an online social networking community such as Facebook,
Linked-In, My Space or Twitter. Three years later, that number has more
than doubled to 48 percent as of this month. Of those who are social
networking, 55 percent say they have used it to promote their
businesses, which is up from 45 percent in 2009.
In addition, 35 percent of small business owners who told the Watch that
they promote their operations through social networking use four or five
sites; 43 percent use two or three sites; 20 percent use one site; and 2
percent use more than five sites.
In terms of which networking opportunities they seek most, online sites
moved into second place at 14 percent, a jump from 8 percent last year.
Other networking avenues include:
Local, in-person networking groups - 26 percent
In person at conferences and organized events - 10 percent
Chambers of Commerce or trade associations - 9 percent
E-mail - 6 percent
Other forms of networking - 15 percent
Not sure - 21 percent
While the number of small business owners who have Web sites increased
from 37 percent in 2009 to 45 percent in 2010, there are still many who
say they don't need one. Of the 55 percent of small business owners who
don't have a Web site, 57 percent say their businesses will never have
one; 29 percent say they will; and 14 percent are not sure.
Other Networking Poll Highlights:
The biggest benefit cited by members of social networking sites is
getting new business leads: 32 percent of owners cited new leads as
the top benefit, followed by getting business tips, 12 percent;
getting new suppliers, 2 percent; getting new employees, 0 percent;
benefiting in other ways, 29 percent; not benefiting at all, 22
percent; and not sure, 3 percent.
78 percent of small business owners are not members of their local
chambers of commerce.
72 percent are not members of an online community specific to their
industries, down from 78 percent last year.
44 percent have used e-mail to promote their businesses, up from 40
percent in 2009.
The views and opinions expressed by small business owners and
consumers who participate in the Small Business Watch survey are their
own and do not necessarily reflect those of Discover
Financial Services or its affiliates.
About the Small Business Watch
The Discover Small Business Watch is a monthly index measuring the
relative economic confidence of U.S. small business owners who have less
than five employees, a segment that consists of 22 million businesses
producing more than a trillion dollars in annual receipts. The Watch is
based on a national
random survey of 750 small business owners. It is commissioned by
Discover Business card, which strives to offer the best business credit
card for American small businesses, and is conducted by Rasmussen
Reports, LLC (www.rasmussenreports.com),
an independent survey research firm. The numeric index is calculated by
assigning values to responses to a set of six consistent questions. The
base value of the Watch was established at 100.0 based on surveys
conducted in August 2006. In addition to generating the index, the Small
Business Watch surveys small business owners every month on key issues,
and polls 3,000 consumers four times per year to gauge purchasing
behavior and attitudes towards small businesses. For past results and
survey data, visit www.discovercard.com/business/watch.
For information on Discover Business card, visit www.discovercard.com/business.
Discover Financial Services (NYSE: DFS) is a direct banking and payment
services company with one of the most recognized brands in U.S.
financial services. Since its inception in 1986, the company has become
one of the largest card issuers in the United States. The company
operates the Discover
card, America's cash rewards pioneer, and offers personal and
student loans, online savings accounts, certificates of deposit and
money market accounts through its Discover
Bank subsidiary. Its payment businesses consist of Discover Network,
with millions of merchant and cash access locations; PULSE, one of the
nation's leading ATM/debit networks; and Diners Club International, a
global payments network with acceptance in more than 185 countries and
territories. For more information, visit www.discoverfinancial.com.
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SOURCE: Discover Financial Services
Discover Financial Services
Lauren M. Onis