American Express OPEN released a ten year analysis of its Small Business Monitor Survey. From 2002 to 2011, the company has sponsored a semi-annual survey to gauge small business outlook and to learn more about entrepreneurs’ plans and activities for their firms. Up until 2007, small business optimism has been consistently high. However, from the beginning of the recession and financial crises to the current period, the surveys found that small business optimism has never recovered.
The America Express OPEN analysis of the surveys provided the following highlights:
• “Between the fall of 2002 and late 2007, optimism was high among virtually all small business owners, reaching its highest point in mid 2005. Optimism plummeted between late 2007 and early 2008, and has not recovered for small business owners regardless of region, size of firm, industry or sex of the owner.”
• “Business owners in the South and West were the most optimistic in the country prior to 2008. Over the past four years, much greater regional volatility in business outlook is seen.”
• “Prior to 2008, there was little difference in optimism by firm size. Since that time, however, there is more volatility in outlook among the larger small firms, with the biggest plunge seen among firms with 20 to 49 employees and those with $500,000 to $999,999 in revenues.”
• “Small retailers are the bellwether industry group. When business optimism plummets, their pessimism leads the way.”
Certainly the rough economy has played a role in the lack optimism among small business owners. But government policies have exacerbated their grim outlook and lack of confidence. That was made clear in a June 2011 “Entrepreneurs and the Economy” survey conducted by SBE Council, which found that 76 percent of small business owners were not at all satisfied with the federal government’s economic policies.
Small business owners continue to express their concerns over the surge of regulations coming out of Washington, uncertainty over taxes, as well as the high cost of health coverage that continues to tick higher as a result of the new health care law. The bottom line is that Washington has not produced any pro-growth policies -- only barriers and costly burdens that are dragging businesses, investors and the economy down.
President Obama just completed his heartland bus tour, and he got an earful from small business owners. Unfortunately, he dismissed what one Illinois farmer was telling him about the nuisance of government regulations. The President suggested the farmer was getting bad information from his business association, and that he should call the federal government (USDA) for accurate information.
There you go. A perfect illustration of why small business owners have little to no optimism.
Karen Kerrigan, President & CEO, SBE Council