Small US businesses optimistic despite gloom

Global - Amid a steady stream of grim economic news, a large majority of small business owners are optimistic about the economy and their company's financial future, revealed two recent UPS Business Monitor surveys.

The first of the two UPS Business Monitor US surveys was conducted between September and October last year, where some 91% of small business owners said they expect their company to be in the same or better financial shape in a year than it is today.

The second survey was conducted in mid-December after economic conditions worsened. In the follow up survey, optimism slipped only slightly, from 91% to 86%.

"Despite incredible changes in the economy, small businesses still see vibrant opportunities," said Jim Beach, a professor of entrepreneurship at the University of Tennessee. "That eternal optimism and entrepreneurial spirit in the face of adversity is an asset that bodes well for the future of our economy."

The optimism is significant as respondents did not otherwise project a speedy economy recovery, UPS said.  In the first survey, almost half or 47% of respondents said they believe the US economy will begin to improve in 2010 or later but that number climbed to 67% in the December survey.

These small business leaders are also optimistic about their workforce prospects, with 66% planning to keep the same size workforce for the next 12 months; 24% indicating an interest to increase their staff strength and only 10% planning to reduce it.

The survey however found that small business owners who engage in international trade were more likely to project that their businesses would be in a better economic position in the next year (56%) compared to those who did not (41%).

The gap widened in the second survey, with 62% of small business owners who trade internationally believing they would fare better than the 39% that did not.

Despite the optimism, the survey revealed that some 73% of small businesses were not and did not plan to trade internationally, citing reasons as unfamiliarity with global markets, language barriers and apprehension about preparing customs and other documents.

"This survey shows that the vast majority of small business owners are missing out on the key opportunities offered by international trade," said Alan Gershenhorn, UPS senior vice president of worldwide sales and marketing. "By expanding opportunities in new markets, cross-border trade can help small businesses diversify, buffering them against risk and helping them stay strong in tough times."