Report Shows Small Businesses Struggling
A recent National Small Business Association (NSBA) report shows a small business community struggling to stay afloat in a dismal economic climate. In the “2009 Mid-Year Economic Report,” released this week, 94% of small businesses said the national economy today is worse off than five years ago, and those who think the economy is doing much worse jumped to 75% in July 2009.
“Nearly half of small businesses, up from a third six months ago, are not confident about the future of their own business,” said Todd O. McCracken, NSBA president. “The ongoing erosion of confidence from traditionally up-beat entrepreneurs is a wakeup call to lawmakers that small business may not be able to tread water much longer.”
Included in the report are indications of the difficulty small businesses are facing in reference to three key factors — revenues, profits, and employee size – which all declined between December 2008 and July 2009. Revenues and profits took an even larger hit with 62% experiencing a decrease in revenues, and 66% reporting a decrease in profits. The number of small businesses hiring new employees in the past 12 months dropped from 18% in December to 9% in July.
Access to capital continues to be a key issue, with 80% of small business owners negatively impacted by the credit crunch — up from 67% one year ago. More than 60% reported worsening terms on their credit cards and 38% were subject to a decrease on their lines of credit or credit cards.
“We’re struggling. Despite several economic stimulus packages and lots of talk, only 3% of small businesses reported a positive impact of the stimulus bills on their business,” stated Keith Ashmus, NSBA chair and co-founding partner at Cleveland, Ohio-based Frantz Ward L.L.P. “America’s small businesses need and deserve better.”
The NSBA is a small business advocacy organization that reaches more than 150,000 small firms nationwide.