Small Business Studies Reveal Mixed Views on Future Economic Conditions

Like most business owners you are probably wondering what 2008 holds. The answer to that question is really "It Depends."

We see many companies prospering like never before and others in complete decline, and of course most in between. Those who are taking steps to respond to current conditions positively moving ahead.

Two recent studies show a mixed outlook.

AllBusiness.com, Inc.,announced the results of its 2007 year-end "SMB State of the Union Study" and SMB Barometer. AllBusiness.com is a wholly-owned subsidiary of Dun & Bradstreet, and a leading online resource for businesses, The study of 400 business owners, conducted by Frank N. Magid Associates found that "Overall Business Sentiment Among SMBs is Positive."

A few days earlier Discover Business Card released these findings from their Discover Small Business Watch a monthly index measuring the relative economic confidence of U.S. small business. "Economic confidence among small business owners is off slightly for December, down a half-point from the previous month, as small business owners expressed less confidence that economic conditions are getting better, either in the general economy or with their own businesses. At 92.7, the Discover Small Business Watch is down from 93.2 in November, a full 17 points lower than at the same time a year ago."

The All Business Survey found that,

"For the 3rd straight year-end forecast, SMBs are generally optimistic about their business outlook for the coming year and say the falling value of the dollar is their most important economic concern. Other findings focused on SMB outlook included:

--  55% of small business leaders planned to hold a holiday party while 38% of small businesses did not. One recent survey of bigger businesses indicated that 85% of companies hosted a holiday party this year.

--  30% of small business leaders were planning on giving year-end bonuses and 33% were not.

--  60% of small business leaders are concerned about the falling value of the dollar while 23% are primarily concerned about immigration.

--  78% of small businesses took green measures this past year; recycling paper and trash were the most common measure.

--  Overall, 73% of small business leaders are optimistic going into 2008 dipping slightly from 75% in 2006 and 79% in 2005.

"We have been tracking the search habits of SMB decision makers since the launch of our Web site, and we're excited to report that search is now their dominant source of business information. This indicates how deeply seated the Internet is as a primary business tool. Search is where they start the research process and increasingly, search is where they find the best answers," says Kathy Yates, CEO of AllBusiness.com. "Given so many pessimistic forecasts about interest rates, the housing sector, oil prices and a potential recession, we're also gratified to see a dose of optimism within the SMB community heading into 2008."

SMB Barometer Stays Steady and Growth Oriented

Launched near the end of 2005, AllBusiness.com's SMB Barometer provides a numerical figure that measures overall SMB health by reflecting the combined values of five components, including staffing plans, business real estate trends, business branch plans, technology investment and overall business outlook. The barometer reading is currently at 63, the same that was reported 4th Quarter last year signaling continued optimism.

In the Discover Card  Survey, December Key Findings, it was revealed that:

-- 28 percent of small business owners feel that economic conditions for their own business are getting better. The percentage has been steadily decreasing since September, when 40 percent of owners felt conditions were improving.

-- 65 percent of small business owners feel that economic conditions in the U.S. are getting worse, slightly fewer than the 68 percent who felt that way in November. The number who believe it is getting better remained the same.

-- 42 percent said they have experienced cash flow issues over the last 90 days, an increase from 38 percent in November but even with 42 percent from December 2006.

-- Plans for spending on business development increased this month, with 32 percent of owners planning to increase spending on activities such as advertising and inventory, compared with 29 percent in November, but lower than 37 percent in December 2006.\

So what does it all mean?

Every business has the opportunity to forge its own course. In some cases this may mean a complete revamp, changed product line or service offerings. Smart investment in technology and or marketing that will produce a true ROI is essential to continued growth or in some cases simply surviving.