As a response to economic turmoil, American Express OPEN conducted research -called the Economic Pulse - October 7th and 8th to look at how sentiment has changed in the past two months and gauge opinion on breaking news such as the $700 billion financial rescue package.
Credit tightening has become a major issue: 63% of small business owners say the tightening of credit has affected their business, compared with 50% in August. As a result, 12% have had to lay off staff, 79% say sales are decreasing and 51% say they have had to tap personal assets to pay business expenses.
Here are some specific findings:
-
55% of small business owners believe the financial rescue package signed into law on October 3 will be effective in some way to stabilize the economy -- although more than half, this is not a strong endorsement
-
25% of small business owners say increasing the amount of bank deposits insured by the FDIC from $100,000 to $250,000 will help them -- I hope this is not low because the remainder are already in a weak cash position
-
33% of small business owners are raising prices to manage in the current economic environment versus 48% in August -- this is probably a sign of sagging demand
-
71% of small business owners are stressed out by the economy; 55% were stressed out in February -- this finding worries me the most, as we need small businesses to get us out of this mess.
-
And the most sobering finding? Nearly one in five (18%) small business owners risk going out of business because of the economic climate.
Leave a comment