Cash flow an issue, but many plan to hire new staff
NEW YORK: Owners of small and medium-sized businesses in the US say 2010 was a far better year than they expected, and they’re optimistic about the economy in the new year.
That’s according to a recent survey by Prepaid Expense Card Solutions Inc. In fact, 71 percent of respondents said business performance shaped up to be “much better” or “somewhat better than expected” in 2010. Just four percent said business performance was “worse than expected”.
Other survey results include:
• 21 percent of business owners said they’ve been turned down for a bank loan or credit line in the past year;
• 38 percent said credit card companies have “unjustifiably” lowered their card’s credit limit or closed the account completely.
When respondents were asked to rank—on a scale from one to 10 (with 10 the most difficult)—how hard it has been in 2010 to maintain adequate cash flow for their businesses, 48 percent said between six and 10, the “most difficult” end of the scale; 27 percent fell into the “least difficult” category, with rankings of one to four.
Respondents raised the cash flow issue again when asked: As a small business owner, which issues keep you awake at night? The majority of respondents (65 percent) said “sufficient cash flow”. As well, “taxes” (31 percent), “volatile sales” (29 percent), and “debt” (25 percent) rounded out the top four answers.
Looking ahead to 2011, respondents were optimistic about their business performance. The survey found that 34 percent of owners say they expect profits in the coming year to be “significantly better” than in 2010; 28 percent answered “slightly better”, while five percent answered “slightly worse”.
Based on their optimism, 59 percent said they plan to hire employees, 28 percent said they don’t know yet and 14 percent said no.