Economy gives weary small businesses little rest, though some see things easing
Millions have embraced entrepreneurialism to earn a living, as well as fulfill personal ambitions. But the dour economy has made that already-rough career path even bumpier for some.
Nearly half of small-business owners in a national survey say economic conditions for their firms will worsen in the next six months -- and 49 percent said temporary cash-flow issues over the past 90 days already have caused them to hold off on paying bills. The findings were released earlier this week after polling by credit card issuer Discover Financial Services of 750 small-business owners.
The percentage reporting cash-flow issues is at the highest level since August 2006, when Discover launched the Discover Small Business Watch monthly survey of entrepreneurs who have fewer than five employees.
Despite the challenges, in some parts of the country the level of negativity is easing. A lot of Utah small-business owners are cautiously upbeat, said Candace Daly, state director of the National Federation of Independent Business.
"Some of them, and it all depends on the business you are in, had better fourth-quarter (sales and income) numbers than they thought they would have. And in the first quarter, they held steady."
That said, small-business owners as a group nationally aren't just pessimistic about their own circumstances -- they're pretty much down on the economy as a whole. Six in 10 deem the U.S. economy "poor" -- up from 50 percent in April. And 57 percent say it's getting worse. That's up from 51 percent last month.
As owners hunt for new business leads and cope with client demands, their downtime is diminishing, Discover Small Business Watch spokesman Jon Drummond said. As a result, less sun this summer and more work. And holiday prospects for the rest of 2009 don't look so hot, either:
» Fewer vacations, and more work. Many workers had a Memorial Day break, but most small-business owners were glued to their laptops and cash registers. Fifty-seven percent said they work "always" or "most of the time" on official holidays. Just 31 percent of total adults answered the same way.
David Rostan, who founded the community Web site SocialYell.com last year, will work while he's on a vacation that began last week. Now that he runs his own firm, he's also more conservative about taking time off, allotting just one week for his trip to Ireland.
"In all my previous jobs, I've maxed out allowable vacation times," he said.
But the extended hours and pared down vacations may be concentrated among younger businesses, especially those that haven't weathered previous recessions.
"I'm still trying to live my life," said Bill Schjelderup, president of Salt Lake City-based Companion Corp., which sells software to schools. He isn't working extra hours or days, or is he skimping on vacations.
"But my business is 20-plus years old, and I'm at a different part of my life. So I've got a safety net" that younger business owners may not have, Schjelderup said.
» Extended workweeks. Slightly more than 60 percent of small-business owners say they toil six or seven days per week, while only 22 percent of the general population say they work that much.
Adam Menzel, who co-founded stock market-related Ticker Technologies and Market News Video, says he's constantly working. Last Friday was slated to be a rare vacation day, relaxing in Martha's Vineyard, yet he conceded: "I'm checking my BlackBerry, and I'm returning phone calls." The updates he gets 24/7 through his BlackBerry allow him to be a bit more relaxed when not at work. "I'm definitely a lot calmer having it."
Small-business operators have cut back on vacation time. The percentage of those who responded that within the past year they had taken a vacation that lasted a week:
2008 » 40 percent
2009 » 29 percent
Source: Discover Financial Services