Dr Jeff Cornwall

A new Fortune Small Business/Zogby Poll has found that a little less than half of small business owners say that they have been affected by the recession.  What is really remarkable to me about these results is that if you listen to the media, every business in the US is on the brink of disaster. 

The fact that 57% have not been damaged gives us hope that the entrepreneurial engine we need to pull us out of the recession is ready to grow when the time is right.  This fits with what I am hearing from entrepreneurs. 

Here is a summary of this poll:

• 43% of small business owners say their businesses have been damaged by the recession
• 22% say they have cut the price of products or services
• 17% say they have downsized through layoffs or attrition
• 14% say they have cut salaries
• 27% say their businesses lost money in 2008; 22% say they broke even
• 45% say they would still choose to start a company if they were entering the workforce during the recession

In a speech at Columbia University yesterday Czech President Vaclav Klaus offered advice to US policy makers.  From Rueters:

“I am therefore convinced that fighting for freedom and free markets, something we always appreciated here in this country (the United States), remains the task of the day,” Klaus said….

“The best thing to do right now would be to temporarily weaken, if not repeal,” business regulations on labor, the environment, social issues and health, he said.

William C. Dunkelberg, chief economist for the National Federation of Independent Business issued the following statement on February job numbers based on NFIB’s monthly economic survey that will be released on Tuesday, March 10.

“There was a decline in average employment per firm of 1.0 workers reported for the past three months by small business owners in February, the largest decline in survey history.

“However, 11 percent reported unfilled job openings, unchanged from February and a positive sign going forward. Job openings are a significant predictor of the unemployment rate. Over the next three months, 13 percent plan to create new jobs (up four points), and 10 percent plan workforce reductions (down four points), yielding a seasonally adjusted net-negative 3 percent of owners planning to create new jobs, three points better than January but still historically very low. 

“Not seasonally adjusted, job-creation plans were positive in all industry groups except manufacturing. It looks like the service sector may be finding its legs. Of the nine census regions, job-creation plans turned positive in all census regions except the East South Central and South Atlantic states.

“By year end, growth should be positive again, perhaps as strong as a 4 percent annual rate. Large pools of pent-up demand are forming and will soon begin to be transformed into actual spending.”

Let’s hope he’s right!

According to today’s ADP Small Business Report, small businesses lost 262,000 jobs in February.

This marks the fourth consecutive month of decline in the small-size business sector.  February’s number shows greater job losses than January demonstrating the recession’s continued impact on small businesses.  Since small businesses are the backbone of the economy and our primary source of new jobs (80% of new jobs over the past 20 years), today’s report gives an indication of the long road to recovery.