SOURCE: Decision Analyst

Decision Analyst

March 05, 2010 11:55 ET

Small Businesses Still Mired in Recession, According to National Survey by Decision Analyst

ARLINGTON, TX--(Marketwire - March 5, 2010) -  Small businesses in the U.S. (i.e., fewer than 100 employees) are still feeling the effects of the global recession. The good news is that small businesses are not materially worse off in January 2010 than they were in January 2009. The bad news is that business conditions were dismal in both January of 2009 and 2010. The Decision Analyst surveys of over 6,500 small businesses indicate that the effects of the ongoing recession on small businesses are stabilizing. There are even hints in the survey data that economic conditions for small businesses may be improving in 2010. For example, more small businesses in January 2010 reported "very strong" or "somewhat strong" business activity than in January 2009 (22% in 2009 compared to 25% in 2010). However, a large number of small businesses went out of business during 2009, so their answers are not included in the 2010 survey data; this should temper our optimism.

Most small businesses in the U.S. are still planning to take steps in the next three months to control costs or reduce expenses. 

Steps Will Take To Reduce Costs In
Next Three Months
Percent Of Small Businesses Mentioning
Cost Reduction
  2009   2010
Ordering smaller quantities of supplies 29%   26%
Cutting down on travel expenses 27%   22%
Delaying equipment purchases 23%   22%
Limiting overtime hours 22%   20%
Freezing hiring 21%   20%
Reducing employee parties or entertainment 21%   18%
Switching to less-expensive suppliers 20%   19%
Raising prices 17%   13%
Reducing inventories 16%   14%
Reducing employees' hours worked 16%   14%

"It's evident that many small businesses in the U.S. are still experiencing tough economic conditions and continue to take steps to reduce costs," said Jerry W. Thomas, President/CEO of Decision Analyst. "Overall, 74% of small businesses reported in January 2010 that they planned to take one or more actions in the next three months to reduce operating costs, a slight improvement over January 2009 (77%). Many small businesses continue to struggle with the tight lending environment, however. Slightly under one-fourth (23%) of all small businesses reported that credit is 'less than adequate to meet needs' (the same percentage as January 2009). It is also evident in the survey data that small businesses are resilient and nimble. If economic conditions improve in 2010, small businesses will react quickly and ramp up investments in equipment and people.

"If an economic recovery comes in 2010, it will be partially driven by the actions of millions of small businesses in the U.S. Governmental policies and actions that encourage and inspire small businesses will tend to pay great economic dividends because these small businesses are so efficient, productive, and energetic," said Jerry W. Thomas

Methodology

Decision Analyst's U.S. Small Business Survey 2010 was conducted online using its Executive Advisory Board®. The surveys were conducted January 5-14, 2009 among 3,974 respondents and January 4-15, 2010 among 2,791 respondents. The respondents were executives/managers/owners working at companies with less than 100 employees. The sample included small businesses in all 50 states. The margin of error is approximately 1.5%, plus or minus, at a 99% confidence level. If you would like a free copy of the U.S. Small Business Survey 2010 report, email Cristi Allen, callen@decisionanalyst.com.

Decision Analyst

Decision Analyst (www.decisionanalyst.com), based in Dallas-Fort Worth, is a leading global marketing research and analytical consulting firm specializing in advertising testing, strategy research, and advanced modeling. 

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