American Express OPEN Small Business Monitor

Twice a year, the American Express OPEN Small Business Monitor takes a survey of over 800 small business owners to see how they are reacting to the current economy. On October 4, the Fall 2011 survey results were released, comprised of the opinions of hundreds of small business managers and employees. Results indicate that while the National Bureau of Economic Research may have declared us free of the Great Recession back in 2009, nearly 40% of small business owners believe we’re not out of the woods just yet. While this number is down from 44% a year ago, managers and owners are still adapting their business practices to stay afloat.

Small business owners have become “more calculating and measured in how they run their firms,” according to Susan Sabbott, president of American Express OPEN. “When cash is tight, they pull back on spending or look for creative ways to access capital; when plans for growth are unrealistic, they put them on hold until the time is more prudent.”

Less than a third of these organizations see themselves growing within the next six months, and this includes hiring new staff. Instead, they find themselves focusing on improving the morale of the employees that they do have, offering significantly more healthcare benefits and flex time than they have since 2009.

Despite the fact that they may not have plans to expand anytime soon, small business owners are taking other measures to stay competitive in this sluggish economy. Some 28% have turned to social media outlets to survive, although over 50% see it as a waste of time. Managers are turning increasingly to private funds, charge cards and lines of credit to contend with cash flow concerns, and are distinguishing between capital expenditures that are clearly “revenue generators” and those that are simply “adding cost to the bottom line” (Sabbott). Nearly half plan to make a capital investment within the next six months, up 4% from the spring. With technology being the most likely, purchase real estate and office furnishings are taking the back burner. 

Overall, small business owners are making smart decisions. While they may not be as optimistic about the future as they were six months ago (only 77 percent see the glass half-full, down from 85 percent a year ago) they are taking the steps they need to pull through. Some even find themselves “riding high,” undeterred by the effects of the economy.

More geographic and gender specific survey results can be accessed by contacting American Express OPEN at OPEN.com, openforum.com, or twitter.com/openforum.