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Small business owners becoming optimistic about economy

Throughout the nation, small business owners are becoming more optimistic about the economy, according to a just optimismpublished survey by Discover small business Watch, which monitors small business activity monthly. The same survey showed that more small business owners are relying on cyber networking as a way to market.

The monthly index increased more than 10 points, rising to 88.5, up from 78.2 in March and the highest since the Watch hit 90.8 in February 2008. April’s mark represents the third consecutive monthly increase in economic confidence among small business owners.

The April nationwide survey showed:

• 32% think economic conditions are better now; 40%, worse;

• 39% say they have had cash-flow issues over the last 90 days, but 58% say they have not;

• 12% say they will be hiring more workers; 11% will be laying off workers; and 75% say nothing will change.

A comparison of current survey results with those previously done indicated:

• The number of small business owners who say the economy is getting better nearly doubled to 31%, up from 16%in March and the highest level in this category in two years. The number of owners who see the economy getting worse continued to decline. It dropped to 51% in April, down from 69% in February 2009.

• 91% of small business owners still ranked the current economy as fair or poor, a figure that has been constant for eight months.

• 32% of owners see economic conditions for their businesses improving, up from 24% in March; while 40% see conditions getting worse, down 7% from the previous month; 22% say it’s staying the same and 6% weren’t sure.

• 58% of owners say they have not experienced temporary cash flow issues in the past 90 days that have caused them to hold off on paying some bills.

 21% of owners say they plan to increase spending on business development over the next six months, unchanged from March; 46% plan to cut spending and 30% will make no changes.

Social Networking on the Rise

• When asked if they were a member of any online social networking community such as Facebook, Linked-In, My Space or Twitter, 38% said yes, which is up from 22% who answered a similar question in October 2007.

• When asked which networking opportunities they use most, 46% of small business owners identified traditional methods such as conferences, trade shows, local in-person groups or chambers of commerce. Of the remaining respondents, 16% cited “other” networking opportunities, 8% cited online sites, 7% said e-mail, and 22% said they weren’t sure.

• 62% of small business owners still do not have Web sites for their businesses. That is down from 65% in November 2007.

• Of those who currently belong to an online social network, only 45% use it to promote their businesses.

 40% of owners say they have used e-mail to promote their businesses.

• 42% say they spend three or more hours online each week related to their businesses, 29% are online less than an hour, 21% stay on for one to three hours, and 5% aren’t sure.

The Discover Small Business Watch is compiled each month by Rasmussen Reports, LLC, an independent research firm, based on telephone interviews and survey responses from approximately 750 small business owners. The margin of error for the sample involving small business owners is approximately +/- 3.8 percentage points with a 95% level of confidence. This represents a slight increase from +/- 3.2 percentage points which was caused by a change in sample size from 1,000 to 750 in April 2009.

Source: Discover Financial Services


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