Oct. 24--The small business world in California could be on the verge of feeling a lot less small than at any time over the last five years, a study of the state's entrepreneurs found.
The survey, the American Express OPEN Small Business Monitor, found that many business owners in the state still have misgivings about the strength of the economic recovery. But almost six in 10 do have a positive view of the economy, and many are also markedly more bullish about investing in new workers and equipment.
Several business owners in Inland Southern California seem more upbeat, and American Express, which has done this survey twice annually since 2002, said the results indicate steady progress. The study, which is done nationally, was based on 1,038 telephone interviews with company owners or managers. All have fewer than 100 employees.
In California, 62 percent said they plan to make capital investments in their businesses over the next six months, up from 55 percent last fall and just 36 percent in the spring. Also, 40 percent say they plan to add more workers, compared to 33 percent six months ago and 29 percent last fall.
More revealing are the findings about entrepreneurs' cash flow situations. Six months ago, more than three-quarters said they had cash flow problems, but that number is down to 59 percent now, American Express found.
"Small business owners appear poised to flip the switch to growth mode," Susan Sobbott, president of American Express Open, said in a statement.
At Brithinee Electric, a Colton business that repairs large motors and generation equipment, revenue tends to come in two distinct streams and both are getting stronger, said Wally Brithinee, the co-owner. The company's biggest market is fixing municipal water supply equipment, and he said that part of the business is doing better because most cities are struggling less and paying for upgrades.
On the private-sector side, Brithinee said customers are seeking repair jobs and doing so with urgency. During the bottom of the recession year, these customers would hesitate for long periods before proceeding.
"That tells me that their business is improving," Brithinee said of his customers. "We're not hearing, 'We need more approval' like we used to."
Precision Molded Products is doing well enough to move to a larger facility not far from its current Riverside location, Chris Kozloski, the president, said. The company makes plastic, rubber and composite seals for doors and windows of jet aircraft and has both government and private-sector customers.
Kozloski said the business is not without issues, which include higher health insurance premiums charged by his carrier. Also, this month's federal government shutdown left him with a bunch of completed orders -- and no one to deliver them to.
However, he said that he can expect some steady work from Boeing, which he said has a five-year backlog for seals. "The outlook is very good for us," Kozloski said.
Small businesses tend to be major employers in Riverside and San Bernardino counties. While big-box openings get much of the publicity, smaller firms actually create about two-thirds of the region's new jobs.
Michael Vanderpool, president and COO of Security Bank of California, a Riverside-based small business lender, said he is taking careful approach because of the lingering uncertainties.
"I think we do see some optimism," Vanderpool said. "Everyone wants it to be all over by tomorrow, but we know it won't happen that way. It's a slow slosh."
Follow Jack Katzanek on Twitter: @JackKatzanek and check his blog on pe.com/business
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Original headline: ECONOMY: Small businesses feeling some love
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