NEW YORK (CNNMoney.com) -- Do you have any idea if the economy will rebound in 2010? Small business owners don't, and it's the single biggest challenge they face in planning for the year ahead, according to a recent survey by the National Small Business Association.
The industry trade group polled 450 small business owners around the country for its year-end report. Economic uncertainty is their biggest challenge, respondents said: 64% called it a threat to the growth and survival of their business. More than 70% said their sales dropped or stayed flat in 2010, with just 22% reporting revenue growth.
Main Street is largely bracing for another gloomy year: Two-thirds of the owners NSBA surveyed think their profits will stay the same or drop over the next 12 months.
Rising costs push pink slips: Health care reform is turning into a quagmire in Washington, but for business owners, the status quo isn't working. In a separate NSBA study, 92% of small business owners said they expect an increase in the cost of their premiums in 2010. To defray those ever-rising costs, business owners are having to skimp on the benefits.
Forty percent of those the NSBA surveyed said they switched policies in 2009 to one with higher co-payments, and 41% of business owners switched to a plan with a higher deductible.
But most worryingly, some decided that they only way they could make ends meet was to shed staff. In December, one in five small business owners reduced their head count as a way to deal with rising premiums, according to the NSBA's year-end survey.
"In this tough economy, more and more small-business owners are being forced to make the tough decision between keeping their employees or keeping their health insurance," NSBA Chair Keith Ashmus said in a statement supporting health care reform.
Tight credit is another obstacle. "Contrary to various reports that the credit crunch has eased or is no longer a problem, NSBA's members are still struggling," the organization wrote in its report.
Treasury Secretary Timothy Geithner agrees with that assessment: "This credit crunch is not over," he said in November at a Washington forum convened to address the problem. "It may feel dramatically better for large companies, but it is not over for small businesses across the country."
The nation's biggest recipients of bank bailout funds cut their small business lending by $12.5 billion in the last half of 2009. Business owners are feeling that loss: 39% of those polled by the NSBA said they can't get adequate financing for their business, up from 22% in August 2008.
Despite all those challenges, small business owners tend to have faith in their own storefronts. By the end of 2009, 61% of business owners said they were confident about the future of their business -- up from 58% six months earlier. That change marked the first uptick in confidence in two years.
Still, the NSBA tossed some grains of salt on the findings.
"This change is certainly welcome, but taken in context this shows that more than one-third of small-business respondents have concerns about the ongoing viability of their business," the organization wrote. "That amounts to more than 10 million small businesses."
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.93%||4.14%|
|15 yr fixed||3.03%||3.14%|
|30 yr refi||4.02%||4.21%|
|15 yr refi||3.11%||3.21%|
Today's featured rates:
Some families are outraged at the sums they've been offered by Lufthansa as compensation for the Germanwings plane crash in March which killed 150 people. More
The Bank of Russia has cut interest rates again and warned the recession is deeper than it expected. More
Uber promises to pour $1 billion into India over next nine months, says the market is a global priority. More
Fast-food chains that operate in more than 30 locations nationwide are the sole target of a new rule in New York to hike their minimum wage to $15. But consumers and small business owners, as well as some employees, may be the ones to pay the price. More
You can't blame it on the economy anymore. More Millennials now have jobs, but are still living at home. More