Small Business Owners’ Expect Better Sales In Next Six Months

In spite of continued concerns over the economy, small businesses’ hiring plans are stable compared to the spring, with one-in-four planning to hire over the next six months, according to the American Express Open Small Business Monitor.

At the same time,  nearly half (45%) of small business owners’  have a positive outlook on the economy and prospects for their business, down from 51 percent in spring and 55 percent last fall.

Over the last eighteen months, business owners have been streamlining business operations and cutting costs. Now, as a result of those tough decisions, many business owners appear to be in stronger financial position to jump on growth opportunities that might materialize. Fewer report having cash flow issues (53%, down from 60% this spring), and while hiring plans remain stable overall, the number of business owners who plan to hire full time employees in the next six months has doubled to 10% versus spring 2010.

While their confidence in the overall economy declined, more business owners said they thought sales over the next six months would be higher compared to last year (39% vs. 34% in the spring) and employee morale has shown modest improvements.

Business owners are also increasingly tapping into social media to reach customers and prospects. Four-in-ten now indicate they use at least one social media platform; Facebook is by far the most popular platform, with 27% of relevant businesses on board. By comparison, only one-in-ten business owners a year ago were using online social networking to market their businesses.

"Over the last two years, many business owners shelved investment and hiring plans and dipped into cash reserves and personal assets to stem the tide of declining sales," said Susan Sobbott, president, American Express Open.

"Now entrepreneurs are driving more business with existing customers through regular follow-up and better customer service. They’re also tapping into relevant and low-cost marketing tools like social media."