Cash flow problems plague small business owners, report says
More small business owners experienced cash flow issues in December than the month before, rising to 42 percent in December from 39 percent in November, according to the monthly Discover Small Business WatchSM. Small-business confidence in the U.S. economy dipped somewhat this month, while optimism about the year ahead still remains high, the poll found.
This month’s Watch fell to an adjusted 109.7 from its four-month high of 114.6 in November, pointing to a leveling of an autumn-long surge in confidence reported by a survey of 1,000 small businesses with five or fewer employees. Sastry Rachakonda, director of Discover Business Card, attributes this month’s decline in confidence to deterioration in cash flow, which may indicate a trend or may be a function of the season. Discover has not seen a change in business credit card usage, he said in a statement. He added that 64 percent of respondents say current economic conditions for their businesses are the same or getting better, and 82 percent of business owners surveyed claim they’ll employees a raise next year. Seventy percent of business owners say an increase in the minimum wage to $7.25 an hour would have no impact on their employee costs, most likely because many pay more than minimum wage.
The Discover Small Business Watch is a monthly index measuring the relative economic confidence of U.S. small business owners who employ less than five employees, a segment that consists of 22 million businesses producing more than a trillion dollars in annual receipts. The Watch is based on a national random survey of 1,000 small business owners conducted by Rasmussen Reports LLC , an independent survey research firm.
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