Small Business Optimism Continues to Rise
Small-business owners in the survey had more favorable perceptions of their businesses’ current financial situation and cash flow than in the prior survey, conducted in January 2010. The overall optimism score was negative 11 (-11), which is a 5-point increase from January and a 10-point improvement from the survey’s all-time low of -21 in July 2009.
“As consumer and business spending appeared to pick up pace, this bolstered small-business owners’ optimism around their current situation,” says Dr. Scott Anderson, senior economist at Wells Fargo. “In our latest survey, we see more small-business owners describing their cash flows and current financial situation as good and higher percentages seeing an increase in revenues over the last 12 months.”
The survey measures small businesses’ assessment of their current situation, as well as their expectations for how their business will perform over the next 12 months, on six key measures: financial situation, cash flow, revenues, capital allocation spending, hiring and availability of credit. A score of zero would show entrepreneurs are neutral—neither optimistic nor pessimistic—about their companies’ current financial situation and future outlook.
Respondents’ “present situation” improved seven points from negative 29 (-29) in January 2010 to negative 22 (-22). “Future expectations” declined slightly from 13 to 11.
Fifty-four percent described their company’s current financial situation as somewhat or very good—a big improvement from 48 percent in January 2010. Forty-two percent rated their cash flow in the past 12 months as somewhat or very good—an increase from 39 percent in January 2010.
The survey, which has been conducted for the past 28 quarters, measures responses of approximately 600 small-business owners nationwide.
Whenever I talk to audiences of small-business owners, I ask them how they’re feeling about the future. Until recently, despite the growing number of statistics and surveys showing the economy is on the mend, their responses have been uniformly pessimistic. In the past few weeks, however, I’ve started to hear from some entrepreneurs who are feeling positive about their prospects. How are you feeling about the economy?
Popularity: 11% May 23-25, 2010, Washington, DC
National Small Business Week 2010 will begin with three days of events in Washington, D.C., at the Mandarin Oriental Hotel, where more than 100 outstanding business owners from across the country will be recognized. Highlights of the event this year include: the Keynote speech by SBA Administrator Karen Mills; a town hall discussion on how small businesses are driving America’s economy; and a series of executive panel forums on Innovation, Exporting and Social Media.
May 25, 2010, New York City
Instead of installing software , smart companies are using a computer and a web browser to do more with less and move faster than their competition.
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