The continued slump in the U.S. economy has been particularly damaging for small businesses—with one fifth reporting shrinking profits of more than 25 percent, which is leading 79 percent of them to put a halt to hiring, finds a new survey out today.
The Office Depot Small Business Index surveys 1,000 small and medium-size businesses every month and, like other gauges of job growth and small-business confidence, it too sees a gloomy outlook among business owners. Only 42 percent of them believe there will be an economic improvement over the next six months, a figure that dropped significantly from 58 percent in October of 2010.
The month-over-month changes show that small businesses are becoming increasingly concerned about the economy, Office Depot CEO Neil Austrian tells Portfolio.com. “Sentiments are at some of the lowest points since we began the survey last year, with only 42 percent of small-business owners seeing improvement over the next six months,” he says. “The twinge of optimism that we saw earlier this year has all but disappeared.”
Importantly, most companies didn’t feel comfortable expanding staff numbers, results that are in line with research from the Ewing Marion Kauffman Foundation for Entrepreneurship, which showed startups that survive the first two years are doing it with fewer employees than previously. So what can you do to try and beat the gloom? It’s all about standing out from the crowd says Austrian. “Small businesses need to stay nimble and take advantage of the resources that they have available to them.”