Business owners brace for another rough year

By Catherine Clifford, staff reporter

NEW YORK ( -- 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.

Will you be looking for a new job this year?
  • Yes, I don't love my current job.
  • Yes, I'm unemployed.
  • No, I'm happy where I am.

Business owners have a lot to be uncertain about, from when consumers will open their wallets again to whether Congress will pass a health care reform bill.

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." To top of page

Just the hot list include
Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Questions & Answers

QHow does a florist sell more in this economy? We changed our business to designing weddings and events only, as the everyday flowers are not selling. We had to throw out too much product at the end of the week -- flowers are perishable! More
Get Answer
- The Flower Lady, Suwanee, Ga.
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.80%3.88%
15 yr fixed3.20%3.23%
5/1 ARM3.84%3.88%
30 yr refi3.82%3.93%
15 yr refi3.20%3.23%
Rate data provided
View rates in your area
Find personalized rates:
Index Last Change % Change
Dow 32,627.97 -234.33 -0.71%
Nasdaq 13,215.24 99.07 0.76%
S&P 500 3,913.10 -2.36 -0.06%
Treasuries 1.73 0.00 0.12%
Data as of 6:29am ET
Company Price Change % Change
Ford Motor Co 8.29 0.05 0.61%
Advanced Micro Devic... 54.59 0.70 1.30%
Cisco Systems Inc 47.49 -2.44 -4.89%
General Electric Co 13.00 -0.16 -1.22%
Kraft Heinz Co 27.84 -2.20 -7.32%
Data as of 2:44pm ET


Bankrupt toy retailer tells bankruptcy court it is looking at possibly reviving the Toys 'R' Us and Babies 'R' Us brands. More

Land O'Lakes CEO Beth Ford charts her career path, from her first job to becoming the first openly gay CEO at a Fortune 500 company in an interview with CNN's Boss Files. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.