Business owners tap personal assets to survive

November 4th, 2009, 6:00 am · 6 Comments · posted by Jan Norman, small-business columnist

More than 6 out of 10 small-business owners say they are likely to have to use their personal assets to help their companies survive until the economy recovers, according to the Discover Small Business Watch monthly survey.

That one statistic alone goes a long way to explain owners’ lukewarm attitude about spending for advertising and growth and unwillingness to hire more workers.

Are they reflecting economic reality or creating it? Small businesses account for most of the jobs and gross domestic product.

Most — 69% — have been hurt by the recession. Here’s what they say about their business’ ability to rebound in the coming months (click on the image for a larger view):

Source: Discover Small Business Watch

Their expectations for the economy as a whole is even lower:

Source: Discover Small Business Watch

“Small-business owners aren’t showing any new optimism in the economy,” said Ryan Scully, director of Discover’s business credit card. “Half of them think it will take more than 12 months before most people feel the economy has stabilized, and two our of three are expecting to dig into their own pockets to stay afloat.”

Other findings:

55% rate the economy as poor; just 8% say it’s good or excellent
44% think the economy is getting worse and 35% think it’s getting better
43% say economic conditions for their own businesses are getting worse; 29% say better

The Obama Administration’s proposal to increase the size of loans guaranteed by the U.S. Small Business Administration isn’t likely to help; 90% of those surveyed have never applied for an SBA loan, and 48% said they don’t need one.

So what is weighing most on small-business owners’ minds?

Sales generation, 28%
Taxes, 22%
Operating costs, 15%
Health insurance 10%
Access to capital, 5%
Inflation, 4%
Other, 6%

Rasmussen Reports LLC surveys 750 owners of businesses with fewer than 5 employees monthly for Discover Business card.

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Don says:

November 4, 2009 at 6:48 am

Great time to start a new venture, the gov needs your $. The IRS needs your taxes, which buys the attorney to incorp, which buys the CPA, which buys the city business license, which buys the sec of state, which buys the employ develop dept, which buys the health dept. There is a bright side though, the traffic is getting better due to folks staying home due to job losses here in So Cal. Every business owner I know is down, scared/worried. I just hope to be able to pay the mortgage and feed my family and pay the tax deposit, Thanks Gov.

CAlvr says:

November 4, 2009 at 2:33 pm

Just a some items in today’s business news that should not only scare small businesses, but the population in general! This item is from today’s WSJ:

FEARS OF A NEW BUBBLE AS CASH POURS IN
Concerns are mounting that efforts by governments and central banks to stoke a recovery will create a nasty side effect: asset bubbles in real-estate, stock and currency markets, especially in Asia.

The World Bank warned Tuesday that the sudden reappearance of billions of dollars in investment capital in East Asia is “raising concerns about asset price bubbles” in equity markets across Asia and in real estate in China, Hong Kong, Singapore and Vietnam. Also Tuesday, the International Monetary Fund cited “a risk” that surging Hong Kong asset prices are being driven by a flood of capital “divorced from fundamental forces.

————————————————————
India just bought a sh*# load of gold w/U.S. dollars!!! Gold closed at an all-time high today of nearly $1,100 an ounce!

————————————————————
Back at home ~ MicroSoft just announced 800 job cuts. This is part of their announced job cuts of 5,000.

So, boys and girls, tighten your seatbelts ’cause it’s going to be one he!! of a ride!!!

tommy tear says:

November 4, 2009 at 3:52 pm

all my piggy banks are broken

se says:

November 4, 2009 at 4:50 pm

AAAARRRRGGGGHHHH!

Ann says:

November 5, 2009 at 1:44 pm

Personal assets? Hell, they were gone long ago…. Listening to an economist yesterday from Northern Trust Bank in Chicago was not doom and gloom, but it wasn’t totally upbeat either. He said the economy will improve in 2010. And it will improve more in 2011. I think the look on my face must have expressed some doubt, because he also said, it will be a slow growth. I think it’s all about survival, and that’s not a happy way to look at my own independently owned business, every morning, when I roll out of bed, hoping I can pay my bills. Hoping I have sales. Hoping I don’t cut staff. Hoping.

Dave Phillipson says:

November 9, 2009 at 8:30 am

There is no need to dip into personal funds.

In just 5 meetings in the last 12 months, CEO Space has generated over $3 Billion Dollars in funding for its members, while all the banks and venture capital firms were sitting on their hands.

Orange County has a local Chapter that hosts Free Events:

CEO Space is the world’s oldest and largest network for CEOs and Entrepreneurs.

CEO Space is an entrepreneurial training and world class business networking organization, providing MBA-level training and development and an immersion experience of cooperation that results in income acceleration through exponential business growth.
Call 949-477-3283 for details.

Orange County Register