AmEx business survey shows recession sharpens business owners

New York City American Express’s latest survey of small businesses reveals that managing through a recession makes entrepreneurs sharper business owners.

The American Express OPEN Small Business Monitor, a semi-annual survey of business owners, found that four in 10 business owners have an optimistic outlook on near-term business prospects, consistent with a year ago. Retailers are the most optimistic of the groups surveyed.

And about the same number feel that the current economic environment creates opportunities for their business.

"There is no doubt the struggling U.S. economy has tested business owners’ resilience, but the entrepreneurial spirit remains strong and innovative," said Susan Sobbott, president of American Express OPEN. "It is a positive sign that optimism -- often a leading indicator for business growth -- is at levels comparable to last year, suggesting a rebound in business owners' perspectives and their renewed focus on finding the opportunities even in our battered economy."

The survey found that nearly half of business owners (45%) are open to bartering for new products or services with customers or suppliers, and nearly one-quarter (23%) report their barter activities have increased due to the economic environment.

Additional steps include:

• 48% have instituted hiring freezes;
• 30% are no longer taking a salary;
• 27% have a family member working pro bono;
• 25% are renegotiating leases and supply contracts;
• 16% have cut benefits; and
• 18% work a second job.

Not all entrepreneurs, found the survey, view the current economic environment as a hardship; 37% say that the current economic environment actually creates opportunities for their business. Among these opportunistic business owners, two-thirds have a positive outlook on the economy, half plan to make capital investments and just over one-third plan to hire. Nearly all of these glass-half-full entrepreneurs (92%) say that managing through the recession has made them a better business owner, compared with 77% overall.

The American Express OPEN Monitor examines three key industry sectors that provide deeper insight into the economy: manufacturing, retail and services. Retailers were found to be the most optimistic group, as nearly half maintain a positive outlook, vs. just one-third of manufacturers.

Although retailers’ outlooks are more optimistic, they still find themselves faced with challenges: 67% are sacrificing personal finances and 42% are likely to stop taking a salary to deal with the recession.

Many are concerned with cash flow (59% vs. 56% last fall), due in part to less-than-stellar holiday sales last season and larger-than-necessary inventories.

They are less likely to have capital investment plans (32% down from 37% six months ago) vs. other industry sectors. However, one-third of retailers identify themselves as "opportunists," those that make the best of a bad situation (30%).