UPS survey takes pulse of small business owners

A large majority of small-business owners are optimistic about their company’s financial future, according to two nationwide surveys sponsored by UPS.

In the first UPS Business Monitor United States, conducted 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. A follow-up survey, conducted in mid-December after economic conditions worsened, 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.

Importantly, this optimism 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.

Small-business leaders also are optimistic about their workforce prospects. 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.

Companies that trade are particularly optimistic

Small-business owners who engage in international trade 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 Alan Gershenhorn, UPS senior vice president of worldwide sales and marketing. “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.”

Small-business owners may be particularly optimistic for one 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. Only 13 percent said they would retire.