As a response to economic turmoil, American Express OPEN conducted research -called the Economic Pulse – October 7th and 8th to look at how sentiment has changed in the past two months and gauge opinion on breaking news such as the 0 billion financial rescue package.
Credit tightening has become a major issue: 63% of small business owners say the tightening of credit has affected their business, compared with 50% in August. As a result, 12% have had to lay off staff, 79% say sales are decreasing and 51% say they have had to tap personal assets to pay business expenses.
Here are some specific findings:
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55% of small business owners believe the financial rescue package signed into law on October 3 will be effective in some way to stabilize the economy — although more than half, this is not a strong endorsement
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25% of small business owners say increasing the amount of bank deposits insured by the FDIC from $100,000 to $250,000 will help them — I hope this is not low because the remainder are already in a weak cash position
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33% of small business owners are raising prices to manage in the current economic environment versus 48% in August — this is probably a sign of sagging demand
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71% of small business owners are stressed out by the economy; 55% were stressed out in February — this finding worries me the most, as we need small businesses to get us out of this mess.
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And the most sobering finding? Nearly one in five (18%) small business owners risk going out of business because of the economic climate.