Recession brings hurdles and opportunities for small businesses
AXP | Quote | Chart | News | PowerRating -- If there are any silver linings to be found among the dark clouds of a recession, one is that more than three quarters of entrepreneurs feel that managing through the downturn has made them better business owners, according to the recent American Express Open Small Business Monitor.
But business owners and managers are taking a variety of unusual steps to endure the recession, the survey found.
American Express Open is an arm of the financial company that serves business clients.
According to its semiannual survey, about 40 percent of business owners have an optimistic outlook on their near-term prospects, the same number as did a year ago, while 40 percent also feel the current economy has created opportunities for their business. However, while the recession may provide opportunities for some, it also presents challenges. Fewer business owners plan to make investments as a way to grow their companies -- 42 percent this spring, compared with 53 percent a year ago. Also, just 28 percent plan to hire workers this spring. "There is no doubt the struggling U.S. economy has tested business owners' resilience, but the entrepreneurial spirit remains strong and innovative," Susan Sobbott, president of American Express Open, said in a statement.
"It is a positive sign that optimism, often a leading indicator for business growth, is at levels comparable to last year, suggesting a rebound in business owners' perspectives and their renewed focus on finding the opportunities even in our battered economy," she said.
To cope in this economy, 45 percent of business owners said they are willing to barter for new products or services with customers or suppliers, 48 percent have instituted hiring freezes, 30 percent are no longer collecting a salary, 27 percent have a family member working pro bono, 25 percent are renegotiating leases and supply contracts, 16 percent have cut benefits and 18 percent are working a second job.
The survey was based on a national sampling of 727 small-business owners who manage companies with fewer than 100 employees. It was conducted via phone from Feb. 24 to March 9, and is next slated to be done again in the fall.
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