For the first time since September 2007, the majority (55%) of small business owners have a positive view of the economic environment and its impact on their ability to grow, according to the American Express OPEN Small Business Monitor. Concurrently, more firms are at risk of going out of business (17%) than six months ago (11%), due in part to personal funds being tapped out: one-third (32%) say they are using personal or private funds to manage cash flow challenges.
While there appears to be a widening divide between healthy and struggling businesses, even the healthy businesses are proceeding with caution. Fewer firms have hiring plans than at any point in the eight-year history of the Monitor and plans for capital investments equal the record-setting low from Spring 2009 (42%). Other findings include:
- Nearly seven-in-ten entrepreneurs (68%) are “stressed out” by the economy and three-in-ten (31%) say that the current economy has caused them to question their decision to become an entrepreneur.
- Gen Y is least concerned about the economy: 48% expect their business to grow regardless of the economy vs. 27% of Baby Boomers, 22% of Gen Xers and 28% of SBOs overall.
- Manufacturers are the most positive: 33% see the economy improving and expanding opportunities for their business vs. 26% of SBOs, 28% of business services companies and 22% of retailers.