Economic Confidence Improves Among Small Business Owners

“While we saw small improvements in economic confidence almost across the board this month, the mood still remains cautious,” said Ryan Scully, director of Discover's business credit card. “Most small business owners still believe that it will be at least into 2010 before the economy recovers.”

As the new year approaches, small business owners remain cautious about the amount of time it will take the economy to crawl out of its slump. Forty-two percent of owners anticipate that economic recovery will take between 12 and 24 months, while 27 percent believe that it will take longer than 24 months. Twenty-three percent think that the recovery will take less than 12 months.

“Economic confidence has been declining for the past year, and small business owners continue to be resilient by doing whatever it takes, including not relying on credit and taking home less pay,” Scully said. “It’s not surprising that they seem to be buckling down for a long recovery since more than half of them have been telling us the economy is getting worse every month for the past 22 months.”

When asked where they have felt the most negative stress on their business operations in the past year, 30 percent said decreased sales; followed by 23 percent who cited higher operating costs; 17 percent said taxes; 7 percent said financing and credit, and 17 percent said their business has not been under stress in the past year.

It appears fewer small business owners are extending credit to their customers. In December, 25 percent said they extend credit, and 72 percent of those who extend credit say that they have customers who have delayed a payment or asked if they could delay a payment in the last three months. In September 2007, 30 percent of small business owners were extending credit to their customers and 64 percent had received delayed payments or requests to delay payments.