Discover® Small Business WatchSM: Economic Confidence Bounces Back from Brief Tumble
26 Aprile 2010 - 4:10PM
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® 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
markets.”
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 businesses.
“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.
About Discover
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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