SmallBusinessNewz

MerchantCircle, a social network for local business owners, has shared some results from its first Mechant Confidence Index survey of over 12,000 business owners. The firm found that only 23% of merchants believe the worst of the recession is behind us, although only 5.7% expect their businesses to fail.

"Although recent events on Wall Street have taken an economic toll on Main Street, small business owners are a resilient group," said Darren Waddell, VP of MerchantCircle. "Let's not forget that small businesses and entrepreneurs create two thirds of all new jobs in the U.S., and though our first merchant confidence index reveals merchants expect to be challenged during the 2009 holiday season, they are largely optimistic that their businesses will survive."

Here are some highlights from the survey:

- 47.3% disagree or strongly disagree with the statement "The worst effects of the recession are behind us." 23.2% of merchants believe that the worst of the recession's effects are behind us and 29.6% neither agree nor disagree.

-73.9% believe that their business will survive the recession. 5.7% indicate they do not expect their business to survive and 20.4% neither agreed nor disagreed with the statement "My business will survive the recession."

- 42.1% said they would not start their business again in today's economic climate. When responses from retailers are isolated, the figure increased by 9.2%, with 51.3% of retailers saying they would not start their business again.

- 60.1% expect sales revenues to decline or remain relatively the same over the next three months versus the last three months.

- 68.3% expect holiday sales to decline or remain relatively the same in 2009 versus 2008 - one of the grimmest holiday shopping seasons ever.

- 12.6% expect to increase their headcount "somewhat" and 2.1% expect to increase headcount significantly over the next three months. 85.4% expect employee headcount to remain the same or decline over the next three months.

- 47.7% expect their marketing expenditures to remain stable over the next three months, while 26.6% expect to increase marketing spend and 25.7% expect to cut marketing expenditures.

"I expect the 2009 holiday season to be better than 2008 due to some creative inventory management I learned through the downturn," said business owner and survey respondent Ginger MacCutcheon. "In March, I began making adjustments to my product mix to meet the hardships of the upcoming holiday season. I took advantage of buyer's market prices and stocked up for the holidays. I'm glad I did, because I can offer gift items at very low prices, and I plan to make up the difference with a greater volume of sales."

"It is not surprising to see the apprehension of small businesses on the recovery given the breadth and magnitude of the downturn in the past year," said Dr. Mark Fratrik, Vice President at BIA Kelsey. "Nearly half of the respondents indicated that they do not think the worst effects of the recession is behind us. Only when the unemployment rate decreases and consumers start spending will these small businesses start to become optimistic. As a result of this apprehension, these companies are generally not expecting to hire many more people in the near future, nor are they expecting to spend more in marketing/advertising."

One more subject touched upon in the survey was that of the current U.S. administration and healthcare reform. About 75% responded that they think more could be done to help small businesses, and over half favor healthcare reform. According to MerchantCircle, the majority of them support a public option.