The Discover® Small Business WatchSM dropped for the second straight month as news of a congressional rescue plan failed to lift the spirits or expectations of the nation’s 22 million small business owners. The index slipped 3.2 points in October to 71.4, the lowest confidence rating since the Watch was established in August 2006.
Learn more about the research methodology for the Small Business Watch.
October Key Findings:
- 64 percent rate the economy as poor, up from 57 percent in September and the highest rating in this category in the history of the Watch; 8 percent rate the economy excellent or good.
- 53 percent believe economic conditions for their businesses are getting worse, up from 51 percent in September and equaling the all-time high in the history of the Watch
- The number of small business owners who think the U.S. economy is getting worse rose one point to 74 percent in October; 9 percent feel the economy is getting better, up slightly from last month’s record low 7 percent.
- 38 percent of small business owners say they have experienced cash flow issues over the last 90 days, down from 42 percent in September.
- 23 percent plan to increase spending on business development over the next six months, down from 28 percent in September and equaling an all-time low in the Watch; 42 percent plan to decrease spending compared to 44 percent last month; and 33 percent anticipate making no changes, up from 26 percent in September.
Economic Crisis: More than Half of Small Business Owners Disagree with Bailout
- Fifty-seven percent of small business owners say they disagree with the $700 billion economic rescue plan that was approved by the Congress and signed by the president earlier this month.
- 69 percent of small business owners are not confident that the federal government and Congress can address their business needs.
- When asked how the rescue package may affect their business, 53 percent said they do not expect it will have any impact. Only 16 percent think the package will help their business, while 18 percent believe it will hurt.
- 56 percent of small business owners say that they do not believe that government action can help the economy enough to benefit their business.
- 77 percent say that economic conditions have not forced them to borrow money to pay their bills. Among those who are seeking loans, 70 percent say it is harder to borrow money right now.
- 55 percent reported taking home less money in October.
Election: Business Owners Say Campaigns Don’t Provide Forum for Their Issues
- Small business owners continue to believe their issues are not being addressed in the presidential election. Only 19 percent think that this election season has created a forum for them to heard by the candidates.
- As it has throughout this election year, the economy remains the biggest issue for small business owners. In all, 47 percent cited the economy as their No. 1 election concern, down slightly from 52 percent in September. The issue of government ethics and corruption rose to 15 percent in October, up from 9 percent in September; followed by national security at 11 percent; the war in Iraq at 10 percent; healthcare at 6 percent; and immigration at 3 percent.
The Discover Small Business Watch is a monthly index of the economic confidence of the nation's 22 million businesses with 5 or fewer employees. Learn about our small business research methodology.