Small businesses are still unsure and cautious about the economy, according to the latest survey from Sage North America, the leading provider of payroll solutions to small and medium-sized businesses. The survey spoke to 275 businesses, ranging from one employee to approximately 75 employees.
“There’s a lot of uncertainty, and [small businesses] are still cautiously optimistic,” said Connie Certusi, executive vice president and general manager of Sage Small Business Accounting Solutions. “They’re still having a hard time.”
The survey found that 64 percent of respondents believe that the U.S has, or will enter, a recession in the next 12 months. One of the things that’s giving small businesses a cause for concern is the 2012 presidential election, as there is still a lot of uncertainly about taxes, healthcare, and other paperwork that might be required of them.
“They’re waiting to see what happens,” Certusi said. “They’re worried about regulations and what else the government is going to do.”
Current economic conditions have hurt small businesses, as 66 percent of them reported to have felt the pain in the past six months. One thing that was surprising from this study were the responses regarding the U.S credit rating. Over 40 percent of respondents said that the downgrade of the credit rating would have no effect on the economy, while only 31 percent said it would have a negative effect.
However, it’s not all bad news. Small business financing is doing much better. Although more businesses are buttoning down and utilizing their own case instead of applying for loans and other sources of capital, the survey found that a majority of those who sought financing were actually able to get it.
The survey also found that many small businesses are maintaining their employees, 77 percent of respondents said that they plan on keeping everyone that they have on staff.
“They’re not contracting as much as before,” Certusi said. “But they aren’t hiring either.”
Certusi said that those small businesses who make it through these tough economic times will be much stronger and much more solid coming out of it than going into it. To weather through this storm, Certusi does offer a few suggestions for small businesses. First, she suggests that small businesses operate as widely and effectively as they can. This includes utilizing software and automating tasks that can be automated. She also suggests to cut any unnecessary costs and to focus on running the business.
“Hold your customers close,” she said. “The cost to acquire a new customer is high and it is less costly to keep a customer.”
The full Sage Small Business Economy Study can be viewed at this infographic.