Small Business owners optimistic again, according to Dun & Bradstreet survey; 14th annual survey reveals striking contrast over previous year

Business Wire, Dec 5, 1994

MURRAY HILL, N.J.--(BUSINESS WIRE)--Dec. 5, 1994--Small business owners in the U.S. are once again optimistic about their companies' and the country's near-term prospects.

The gain over last year in the owners' optimism is the largest ever recorded in the 14-year history of the Dun & Bradstreet survey of small business owners.

The D&B optimism index rose from an all-time low of 38 percent in 1993 to 68 percent in 1994, the highest level in five years.

"Last year, optimism levels of small business owners were at an all-time low," said William F. Doescher, senior vice president, Dun & Bradstreet Information Services. "But this year, along with a rebound of optimism, we're seeing growing dissatisfaction over excessive government regulation and signs that increasing costs of programs--such as Workman's Compensation--are meeting with greater resistance from the small business community."

Cash tight despite strong sales

Survey respondents, when asked to identify specific problems affecting their companies, mentioned "cash flow squeeze" most often, despite the fact that only seven percent listed "sales" as a problem. Concern over excessive government regulation ranked second, up from fifth place in 1993. Difficulties in finding qualified, motivated employees was fourth, up from sixth in 1993, reflecting the expanding job market.

Ready to spend more

The high optimism level of respondents was reflected in 1995 spending plans. Forty percent said they plan to spend more on advertising and marketing, compared with 34 percent a year earlier. Forty percent also plan investment in facilities, up from 33 percent a year ago, and 33 percent plan to spend money on computerization, up from 22 percent in 1993.

"This year, small business owners told us that they plan added expenditures in almost every category, including purchases of major capital equipment and communications devices," said Doescher.

The small-business owner study also revealed widespread fears of continued rises in interest rates and inflation. Seventy-nine percent of respondents said they expected interest rates to increase. Sixty percent look for more inflation, an increase over 1993, when only 48 percent anticipated more inflation.

The D&B study also suggested some moderation in escalating health care costs; 11 percent reported increases in health care expenditures of more than 20 percent, about half the number reporting such large increases in the 1993 survey.

Many favor a safety net

Nearly half (47 percent) of the respondents favor government action of some kind to provide a "safety net" for those who can't afford health care or who aren't covered by Medicaid, but the idea of government control drew a strong negative reaction from many.

More than half the business owners (54 percent) reported a moderate or substantial impact from environmental regulations. Many mentioned waste disposal restrictions as a major worry. About 21 percent of respondents feel the impact of the Americans with Disabilities Act.

Earlier D&B surveys has indicated growing concern over employee skills, said D&B's Doescher. Sixty percent of respondents in this year's survey employ in-house training programs. Twenty seven percent are now paying for outside skills training, a 15 percent increase from 1993's level.

Sending a message to the President

Each year, D&B asks respondents if they would like to send a message to the President. This year's comments were, in general, strongly negative, although a few urged President Clinton to keep to his recent present course of action. Several respondents sent a one-word message: resign.

Survey Methodology

A total of 4,500 surveys were mailed to a cross-section of small business (less than 50 employees) in late October. A total of 274 responses were received by December 1, yielding a maximum sampling error of plus or minus 6 percent.

Dun & Bradstreet Information Services, North America, is a company of the Dun & Bradstreet Corp., the world's largest marketer of information, software and services for business decision making.

Editor's Note

Copies of the data can be received by calling Joseph Eckert at 908/665-5446.

CONTACT: Dun & Bradstreet, Murray Hill

David M. Monfried, 908/665-6377