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A recent study sponsored by the National Small Business Association revealed that small-business owners are in the midst of challenging times. The report shows just 36% of total businesses polled consider the national economy better now than it was five years ago.
Although minorities and women represent the fastest growing groups in the small- business community, they were more pessimistic than the majority, believing the economy is worse (48% and 53%, respectively, compared with 43% of all business owners).
“The problem right now in this country is we have an economy that is struggling,” says Sharon Joseph, co-founder and co-owner of Harlem Lanes, a bowling alley and sports bar located in New York.
“The general unease of the economy has left small-business owners feeling like things aren’t going in the right direction,” says Todd McCracken, president of NSBA. “[But] as things solidify nationally, I think those numbers will turn around a bit.”
The Washington, D.C.-based small-business advocacy group surveyed 500 small- to mid-sized companies in an effort to gauge their challenges, perceptions, and outlook as fledgling businesses across the country.
For the purpose of the survey, “economic uncertainty” was not defined for the businesses. “In terms of what that meant, [we left that] in the eyes of the respondents,” says Glen Bolger, partner and co-founder of Public Opinion Strategies, the research firm that conducted the survey. Although a myriad of things contribute to their discontent, the findings reveal that the biggest concerns facing these businesses include economic uncertainty, the cost of healthcare benefits, and a lack of available capital.
In addition, while businesses with 100 to 499 employees are able to rely on bank loans and earnings from their business, companies with less than five employees depend more on credit cards and private loans to meet their capital needs–71% revealed that they use credit cards to carry over substantial balances month to month.
McCracken says organizations like NSBA are working to help alleviate some of these issues. For example, he says they have been in talks with individuals on Capitol Hill about limiting how often credit card companies can change terms and conditions as well as how much they charge.
Despite such dismal news, small-business owners remain optimistic. Eighty-one percent of respondents expressed “considerable confidence in a bright future for their own business.” “We are optimistic and we [will] succeed on the support of the community,” says Joseph, who emphasized the importance of investing in black-owned businesses adding that it is up to us to “sustain our own companies.”