Owners More Confident in Business Outlook, Report Fewer Cash Flow Issues

July 2007

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Economic confidence among small business owners rose in July as more small business owners expressed increased levels of confidence in the economic conditions for their business and reported fewer cash-flow issues, according the Discover^® Small Business Watch^SM.  At 107.3, the Watch is up nearly five points from June’s 102.5. 

“Small business owners seem to be more cautious about the larger economy than they were in the spring, but confidence in their own operations has rebounded, and their cash flow seems to remain unaffected,” said Sastry Rachakonda, director of Discover’s small business credit card. “The number of small business owners who report having had no cash-flow issues for the past 90 days is up to 60 percent – the highest it has been since March.”

Learn more about the research methodology for the Small Business Watch.

July Key Findings

• 41 percent of small business owners feel that economic conditions for their business are getting better, a significant increase from 34 percent in June.
  
• 39 percent of owners said that they would rate the overall U.S. economy as “excellent” or “good”, which is nearly the same as last month’s 38 percent.
  
• 38 percent plan to increase spending on business development, up from 35 percent last month

Business Poll: Summer Slowdowns Don’t Apply to Most Small Businesses, B2B Owners Feel It MostBusiness Poll: Summer Slowdowns Don’t Apply to Most Small Businesses, B2B Owners Feel It Most

• “Small businesses that provide services to other businesses clearly see a difference in revenue during the summer months,” Rachakonda said. “Fifty percent of these owners said they notice a slowdown in their own business. However, among all small businesses, 56 percent say slowdowns by other businesses do not affect the bottom line during the summer.”
• The poll found that three out of four small businesses (76 percent) said that their business either increases (33 percent) or stays the same (43 percent) during the summer.
  

Consumer Poll: Family and Friends Come First for Summer Vacationers, Small Motels and B&Bs Not Far Behind

• When consumers were asked where they usually stay during summer vacations, 31 percent choose to stay with friends and family, followed by 21 percent who prefer either a small motel or bed & breakfast and 10 percent who opt for campgrounds. Larger hotels attract 21 percent of consumers.
• “This month’s findings offer two strong pieces of advice for small business owners who are in the vacation lodging business,” Rachakonda said. “One: You need to be on the Internet. Two: A picture is worth a thousand words.”
• When asked where they usually find vacation accommodations, 45 percent of consumers said the Internet, while 19 percent rely on the recommendations of friends and family, 17 percent make their choices based upon a previous stay, 4 percent find lodging through magazines, newspapers or television, and 15 percent weren’t sure.
• Fifty percent of consumers also said they would not stay overnight at a place they had not seen in a brochure, in the media, on the Internet or in person; while 38 percent said they would, and the remaining 12 percent couldn’t decide.

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 research methodology.