Still Fighting

Still Fighting

Two surveys show that small business owners,

both in the Gulf Coast and nationwide, are bulking up on one intangible asset for 2009: Hope.

by Mark Gordon | Managing Editor

In a time where economic projections for the coming year are coated with a thick sheet of uncertainty, there would seem to be one sure-thing prediction: Business owners must be more pessimistic than in past years about what the next 12 months will bring - a logical conclusion given the economic events of the past month.

But that prediction would be wrong, at least according to a pair of unrelated surveys on the pulse of small businesses.

The Gulf Coast Business Review-Progressive Employer Services survey reveals a pattern of optimism in projected hiring and revenue increases for Gulf Coast businesses that mirrors the same 2007 survey.

Another survey, from the National Small Business Association, shows similar rosy projections in some areas.

On a local basis, more than 60% of businesses that responded to the 2008 Review-Progressive survey plan to hire at least one person next year. More than 70% are projecting a revenue increase.

A 2007 survey, also written by the Review and tabulated by PES, produced strikingly similar results in those categories and several others. One major difference, which could be seen as an indicator of a slowing economy, is the survey base. This year, the survey is based on 54 responses out of 183 PES customers that were contacted. In last year's survey, the company heard from 102 out of 520 clients.

The one area where Gulf Coast business owners and executives continue to show caution is in commercial real estate. In 2007, only 8% of the survey respondents indicated they had plans to invest in commercial real estate over the next year, compared to 49% who reported they had no investment plans.

This year, the Review-Progressive survey found a mere 2% of the respondents reported any plans to invest in commercial properties in 2009.

"It was odd how similar it was to a year ago," says Michael Corley, president of Progressive. Just as difficult to explain, given the economic times, "was how optimistic people continue to be," Corley says.

And while Corley is referring specifically to the survey respondents made up of Progressive clients, which are mostly in construction related industries, he could be talking about Small Business, Anywhere U.S.A. That is seen in another survey, released recently by the National Small Business Association.

The survey, which the group conducts twice annually - once in late winter and again in late summer - shows that 75% of small business owners nationwide feel confident about the future of their business from a financial perspective. The survey also reports that 43% of the small business owners who responded are projecting an increase in net profits over the next year and 30% of the respondents expect to hire more people.

Some aspects of the NSBA survey show some dark times on the horizon.

Nearly 80% of the respondents are anticipating a recession or a flat economy nationwide for the next 12 months, for example, while 67% of the small business owners that answered the survey said the nation's economy is worse off now than it was five years ago.

While the NSBA survey results are less buoyant than the Progressive survey, it still rings of an entrepreneurial fighting spirit. "Maybe," says Corley, "humans are inherently optimistic."

Maybe. But it's a sure thing that small business owners are.

BY THE NUMBERS

Forging Ahead

Here is the full text, and the responses, of the 2008 Gulf Coast Business Review-Progressive Employer Services Economic Forecast Survey. The 2007 responses to the same questions follow the 2008 responses. The 2008 survey is based on 54 responses out of 183 PES customers that were contacted, a 30% response rate. The 2007 survey is based on 102 customers out of 520 clients that were contacted, a 20% response rate.

Have you hired new employees in the past 12 months?

Yes 72%

No 28%

2007

Yes 77%

No 23%

If yes, why:

To replace existing employees 50%

To fill new positions 37%

Other 4% 

2007

To replace existing employees...50%

To fill new positions 31%

Other 7% 

How many employees are you planning to hire over the next 12 months?

0 33% 

1 to 5 59% 

6 to 10 4% 

10 or more 4%

2007

0...42% 

1 to 5 50% 

6 to 10 1% 

10 or more 1% 

How much revenue growth do you project over the next 12 months?

No growth 26% 

10% or less 41% 

10% - 20 20% 

20% or more 11% 

2007

No growth 34% 

10% or less 31% 

10% - 20% 20% 

20% or more 4% 

Do you plan on investing in any commercial real estate over the next 12 months?

Yes 2%

No 96%

2007

Yes 8%

No...49%

If yes, will you be looking to:

Lease 1.9%

Buy 1.9%

2007

Lease 12.5%

Buy 87.5%

What percentage of company profits do you plan to reinvest into the company (technology, equipment, etc.) over the next 12 months?

None 31%

5% or less 37% 

5% to 10% 15% 

10% or more 17% 

2007

None 24%

5% or less 27% 

5% to 10 16% 

10% or more 7%