From consumers to investors to voters, everywhere you look these days, confidence is falling over the state of the U.S. economy. And now a new scorecard by SurePayroll, the leading online payroll service, shows that small business confidence is lagging as well.
Optimism among small business owners remained flat at 48% in August after a sharp 20% downturn between June and July. The survey reflects the perspective of 35,000 of SurePayroll's small business customers, which all have 100 employees or less.
"Historically the optimism numbers are 80-90%, of small business owners optimistic about the future," says Micahel Alter, CEO of SurePayroll. "By definition you do not start a small business unless you believe you can overcome tough odds, so to have this down in the 40s is about as low as it goes and is really as low as we've seen"
Two main issues are the root of the pessimism:
1) Small business owners can't grow their businesses due to a lack of demand.
2) And for those small businesses that do want to grow, they cannot find funding.
"A lot of people are pessimistic because they do not see the revenues and those that want to be optimistic can't figure out how to grow," says Alter. "They are trying to figure out what they can do and how they survive bumping along the bottom even if there is a cliff."
Just like the rest of us, small business owners have lost faith in any sort of government solution to the country's economic problems. Herein lies the real concern. "Small businesses are the ones that have traditionally grown us out of every recession we've had," says Alter. If this pessimism persists, it seems the country could be in this economic downturn for the foreseeable future.