“Despite incredible changes in the economy, small businesses still see vibrant opportunities. That eternal optimism and entrepreneurial spirit in the face of adversity is an asset that bodes well for the future of our economy.” –Jim Beach, professor of entrepreneurship, University of Tennessee.
It’s good to see that a positive mindset may be taking hold among a critical freight constituency for truckers – small businesses.
In the first UPS Business Monitor United States survey conducted for delivery giant United Parcel Service between September and October last year, 91 percent of small-business owners or managers said they expect their company to be in the same or better financial shape in a year than it is today.
OK, that’s SO last year you say. Yet a follow-up survey, conducted in mid-December after U.S. and global economic conditions worsened considerably, showed only a small decline in the first survey’s optimism, with 86 percent of small-businesses owners expecting their company to be in the same or better financial shape in one year. Those are some pretty good indicators that America’s small business owners, at least, have tightened the chin straps and are ready to get back at it.
“Small businesses are the key to capitalism and to the job market,” noted Professor Jeff Rosensweig at Emory University’s Goizueta Business School. “[This survey] give us a great finger on the pulse of small business – and these latest surveys give us reason to lighten the prevailing mood of ‘gloom and doom.’”
UPS’s Business Monitor surveys, by the way, are currently conducted in the U.S., Canada, Latin America and Asia and are designed to tap into the thinking of small business decision-makers, monitoring their opinions on a range of business issues (hence the title of these reports).
Alan Gershenhorn, UPS senior vice president of worldwide sales and marketing noted another important trendline gleaned from this survey – the optimism out there is rooted in realism as small-business owners surveyed do not project a speedy economic recovery. In the first survey, almost half (47 percent) of small-business owners said they believe that the U.S. economy will begin to improve in 2010 or later. That number climbed to 67 percent in the December survey, he noted.
TNS conducted this study for UPS, contacting 600 small businesses for the first survey and 151 in the follow up conducted in mid-December last year. Not a lot, I know, but still – to get these many positive results after the steady drumbeat of negative news since the crash of Lehman Borthers last year is, to mind, very significant.
Small-business leaders also are optimistic about their workforce prospects, Gershenhorn said. Two-thirds (66 percent) of respondents in the first survey said they plan to keep the same size workforce for the next 12 months. Almost one-quarter (24 percent) said they will increase their workforce; only 10 percent said they plan to reduce it. A greater number of small-business owners in the second survey expect their workforces to remain the same. Almost three-quarters (74 percent) said they expect their workforce to remain the same this year, 13 percent expect to increase their workforce and 12 percent said they plan to cut staff, he noted.
Companies involved in international trade, Gershenhorn pointed out, are particularly optimistic: in fact they were more likely to project that their business would be in a better economic position 12 months from now compared to those who did not. In the first survey, 56 percent of small-business owners who engage in cross-border trade expect their company to be in a better economic position in one year, compared to 41 percent of companies that did not trade. This gap widened in the second survey, with 62 percent of small-businesses owners who trade internationally expressing optimism compared to 39 percent of non-traders.
Despite this trade-related optimism, the majority of small businesses surveyed aren’t exporting. Almost three-quarters (73 percent) of respondents do not engage – and do not plan to engage – in international trade. Unfamiliarity with global markets, language barriers and apprehension about preparing customs and other documents were among the main reasons why small-business owners say they aren’t trading across borders.
“This survey shows that the vast majority of small-business owners are missing out on the key opportunities offered by international trade,” said Gershenhorn. “By expanding opportunities in new markets, cross-border trade can help small businesses diversify, buffering them against risk, and helping them stay strong in tough times.”
Finally, a “no-brainer” statistics that’s refreshing to say the least: the survey found that small-business owners may be particularly optimistic for a very important reason – they love what they do. When asked in the first survey what else they would do if money were no object, more than one-third (37 percent) said they would continue running their businesses and 12 percent said they would invest more money in their companies, while only 13 percent said they would retire.
In short, this kind of information gives me a lot of hope that things are going to turn around sooner rather than later at any rate.