Microbusinesses Feel Recession Pinch
Jan 12th, 2009 | By Dawn Rivers Baker | Category: ResearchRight now, America’s microbusinesses are feeling as pessimistic about the economy as everybody else, according to the results of a survey released by the National Association for the Self-Employed (NASE) last week. More than 70% of those surveyed indicated that the slow economy has had a significant or moderate impact on their business. In addition, 46% of microbusiness owners say the current downturn is the worst they have ever experienced. Perhaps more worrisome is the fact that, for 26% of microbusinesses, this is the very first economic downturn they have experienced. In a situation like this, experience is often your friend.
Interestingly, there was no overwhelming favorite when the NASE asked survey respondents what steps they were considering taking to address their business challenges. Top choices included scaling back on inventory or equipment purchases (17%), dipping into personal savings to stay afloat (14%), downsizing staff or delaying new hires (11%), and lowering prices (10%). Tied for fifth place on the list were: increasing use of credit cards to deal with cash flow issues, cutting benefits for the business owner and/or employees, and cutting salaries for the business owner and/or employees. That’s another major difference between microbusiness owners and someone like Bob Nardelli. Microbusiness owners are willing to take a pay cut to keep their firms afloat.
