SmallBizResource Blog -- Economy

Small Business' Economic Confidence Continues To Improve

Posted by Gayle Kesten Monday, Apr 27, 2009, 10:39 AM ET

A mild case of spring fever? Even though nine out of 10 small-business owners still think the U.S. economy is in the dumps, their outlook continues to soften, according to the April Discover Small Business Watch.

Those impressions echo comments made by Larry Summers, director of the National Economic Council, on Fox News Sunday."I think that sense of unremitting free fall that we had a month or two ago is not present today," he said. "That's something we can take some encouragement from."

Good to hear, though Summers still predicted unemployment to rise and wouldn't say the economy has turned a corner.

Along the same lines, 91% of the 750 respondents (small business owners with five or fewer employees) who participated in the Discover poll for April rated the economy as fair or poor -- same as we saw in March and the six months. The percentage of those experiencing cash flow issues (42%) and planning to increase biz-dev spending (79%) didn't budge much either.

What did change? Discover's study shows:

• 31% of small business owners say the economy is improving -- nearly double from March's 16 percent and the highest level in this category in two years.

• 51% say the economy is worsening, but that's down from 60 percent last month and 69% in February.

• 32% say economic conditions for their businesses are improving, up from 24% in March.

• 40% say economic conditions for their businesses are worsening, but, again, that's down 7% from March.

Discover also gauged how far respondents are going to leverage the Internet for their businesses:

• 38% of small business owners belong to online social networks, like Twitter, LinkedIn, and Facebook (up from 22% 18 months ago), but only 45% of them use them to promote their businesses.

• 40% use email to promote their businesses.

• 46% rely on traditional methods of networking, such as conferences, trade shows, local in-person groups, or chambers of commerce.

• 62% of small business owners still do not have Web sites for their businesses (close to Warrilow's findings this past September).

• 42% spend three or more hours online each week related to their businesses, 29 percent are online less than an hour, and 21 percent stay on for one to three hours.

How about you? Are you feeling more optimistic these days? Why or why not? And would you have expected more of your fellow small business owners to use the Internet more than they do?

Economy