HispanicBusiness

A new survey shows surprising optimism among America's small business owners, despite the steady drumbeat of dour economic reports indicating falling consumer confidence, tight credit, collapsing housing markets, and rising unemployment.

The survey, commissioned by UPS Business Monitor, interviewed small-business owners and managers. Out a sample of 600, 86 percent reported that they expect their firm to be in similar or even better financial shape during the next 12 months. In contrast, executives contacted by HispanicBusiness.com offered starkly opposing assessments of the short-term economic outlook for small businesses and expressed surprise at the survey's optimism.

According to the survey, one clear sign of small business confidence was the views on workforce reductions expressed by owners and top managers. In interviews conducted in December, the research found that 74 percent expected their workforce to remain the same, while only 12 percent said they planned to reduce the staff, and 13 percent expected to increase their employee numbers.

The UPS report said that small-business owner optimism appeared to be "rooted in realism" as two-thirds of those entrepreneurs predicted that general economic conditions would not improve until 2010 or even later.

Small businesses involved in foreign trade were more likely to predict improved revenues and profits over the next year than those involved in only domestic sales. In the December survey, 62 percent of small-business owners who engage in international trade were optimistic compared to 39 percent of those whose cater to the U.S. market.

Analysts quoted by the UPS survey noted the importance of the survey's findings. Professor Jeff Rosensweig of Emory University's Goizueta Business School explained that "Small businesses are the key to capitalism and the job market." Consequently, the UPS Business Monitor survey offers hope. It "gives us a great finger on the pulse of small business and ... reason to lighten the prevailing mood of gloom and doom."

Business owners contacted by Hispanic Business, however, challenged the survey's results.
Willy Stewart, owner and CEO of Stewart Engineering of Raleigh, North Carolina (and one of Hispanic Business magazine's 100 Fastest-Growing Hispanic-Owned Companies for 2008), bluntly stated, "I don't know where these people are getting their information from."

In his industry, that of construction engineering in the "triangle region" of North Carolina," he said, "It's like someone has hit the pause button, because it has all come to a screeching halt since a few months back."

"There is not a person who I've spoken to in this business who hasn't been deeply, deeply affected by this crisis," Mr. Stewart declared. His own firm is about 20 percent below in staff from one year ago, and he anticipates that there will be further reductions.

One key problem for many small businesses has been cash flow and available credit. Mr. Stewart remarked that "Cash flow is definitely being affected. Credit is being affected as well." Mr. Stewart said, "It's hitting us from both sides, from a reduction of work and from the ability to collect and get credit."

Anthony Fernandez is the president of Albuquerque Printing, another company on the most recent 100 Fastest-Growing list. He offered another not-so-optimistic perspective on business outlook, saying that 2009 would see "flat to a 10 percent decline" in revenues at his firm.

More generally, among small businesses that he knew in the New Mexico region, Mr. Fernandez said the joke circulating was that "flat is the new up." Regarding cash flow, Mr. Fernandez noted that indeed his firm was monitoring its receipts very carefully.

The UPS offers its Business Monitor surveys as an information source to customers so they can "stay ahead in an ever-changing business." The research "surveys small business decision-makers to monitor their opinions on a range of business issues," the company said.