America's small businesses are becoming more optimistic about the economy: The Discover Small Business Watch, a monthly index on the pulse of small business owners, increased to 85.1 in April 2010, up 9.4 points from March and back to levels registered at the start of the year, Discover reported.
Moreover, nearly one half (48%) of small business owners surveyed say they have joined an online social network, such as Facebook, LinkedIn, or Twitter—up from 22% who said so in 2007.
Nearly one-third (30%) of surveyed small business owners say they expect the economic conditions for their business to improve in the next six months, compared with 20% who said so in March.
Some 48% still say the climate is getting worse, but that number is down from the 53% who said so last month.
Regarding intentions to invest in their businesses, 23% of small business owners say they plan to increase spending, up from 18% who said so in March; 43% plan to decrease spending, down from 52% in March; and 31% plan no changes in investment.
Below, other April indicators from the Discover Small Business Watch:
- The percentage of small business owners who say the current economy is good or excellent was 13% in April—the highest level registered in 20 months, and up from 7% who said so in March. Some 29% say the economy is fair, and 57% say it is poor.
- The outlook for the direction of the economy improved: 31% of small business owners say it is getting better, up from 22% in the previous month; 52% say it's getting worse, down from 58%; and 14% say they are unsure.
- Cash flow issues eased slightly: Fewer owners said their businesses encountered temporary cash flow issues in the past 90 days that caused them to hold off on paying some bills: 51% said they did not experience cash flow issues in April, compared with 47% in the previous month. Those owners who had cash flow issues dropped from 46% in March to 45% in April.
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Use of Social Networks Increasing
In the April survey, small business owners were asked questions pertaining to business networking and their use of the Internet.
Among the 48% of small business owners who are using social networks, 55% say they do so to promote their businesses, up from 45% who said so a year earlier. Many of those business owners use more than one site: 43% use two or three sites, 35% use four or five sites, and 2% use more than five sites.
Business Networking Opportunities
Among the business networking opportunities that small business owners seek, online social sites are now the second-most-favored. Below, small business owners rank the top networking opportunities:
- Local face-to-face networking groups: 26%
- Online social sites: 14%
- Conferences and organized events, attended in person: 10%
- Chambers of commerce or trade associations: 9%
- Email: 6%
- Other forms of networking: 15%
- Not sure: 21%
Use of Websites Up
Some 45% of small business owners say they have a business website, up from 37% who said so a year earlier. However, many still say they don't need one: Among the 55% of small business owners who don't have a website, 57% say their businesses will never have one, while 29% say they will at some point and 14% say they are not sure.
Other networking -related findings:
- The greatest benefit cited by members of social networking sites is lead generation: 32% of owners cite new leads as the top benefit, followed by getting business tips (12%) and getting new suppliers (2%). Some 29% say they benefit in other ways and 22% say they do not benefit at all.
- 78% of small business owners are not members of their local chambers of commerce.
- 72% are not members of an online community specific to their industries, down from 78% a year earlier.
- 44% have used email to promote their businesses, up from 40% in 2009.
About the data: The Discover Small Business Watch is a monthly index measuring the relative economic confidence of US small business owners who have fewer than five employees, a segment that consists of 22 million businesses producing more than a trillion dollars in annual receipts. Commissioned by Discover Business card, the survey was conducted by Rasmussen Reports LLC among a national random sample of 750 small business owners.
