Recession is on the way, say small biz owners

Small business owners, with their noses to the coalface, have long been regarded as picking up the early warning signs on economic health.

This makes a number of surveys predicting bad times ahead very concerning. The latest from MYOB released today reports that more than half the business owners and general managers surveyed (57%) feel a recession will occur in the next three years.

And 58% of those surveyed are expecting the economy to deteriorate over the next 12 months.

However the declining confidence in the economy has not dampened small business confidence about their own business performance with more than half (54%) expecting it to be better in the next 12 months.

MYOB contacted 1436 small businesses and their general managers in March.

While small businesses believe there will be a recession, they are not actually planning for it. About 83% of small business owners surveyed consider planning and preparing a business to ensure survival through an economic recession to be important, however only 44% actually have a business plan.

The pessimism reflected in the survey echoes the sense of economic doom picked up by SmartCompany last week in its poll of 110 entrepreneurs. It found that business owners are shelving growth plans, putting spending on hold and putting off paying their bills.

That contrasts dramatically with a SmartCompany poll conducted in February, when just 28% of business owners said rising interest rates and the credit squeeze were directly affecting them.

The MYOB survey also 40% of small business owners reported a somewhat negative impact on their work-life balance from running their own business.

Many small business owners are also feeling isolated, with just under half (48%) of small business owners surveyed agreeing that they often feel isolated or on their own as a small business owner.

>> Read today’s Aunty B: How do I re-energize to cope with the downturn?