Small business optimism has dropped for the fifth straight month. And this time it’s fallen more than the previous three. But with the way things are, what did we expect, especially when almost everyone sees the future as a pit of doom and gloom.
To begin with, I’m not the most optimistic person in the world. In fact, I will often see things in a pessimistic light. But when I look to the recent news of small business optimism dropping, I don’t see problems ahead, I see companies doing what they’re supposed to do. And that shows us that small businesses will have more chance of survival.
When looking at the components, the small business owner is asked a number of questions. Do they plan to increase employment? Do they expect the economy to improve? And the chances are they will say no. The current economic climate is an unstable one, with debts hitting new highs and riots spreading like a rash.
But with the Index released, all of a sudden a wide number of media companies jump on the stats and reveal that small business owners are struggling and are close to extinction. When in reality, they are tightening their budgets and limiting their options so they survive. If they were to make the index look good in the next month, the chances are that most of the companies would make huge losses and create debt. Where is the sense in that?
The financial market might be temperamental at the moment. But that doesn’t mean everything is going down the pan. The Optimism Index even states that ‘the employment story is not a positive one’ because only 10 percent will plan to increase employment. Most will be waiting this period of uncertainty out until they feel a better time is ahead.
There are two types of small company that will survive this spell of ambiguity. Those with good managers, who planned ahead, cut costs and take a pessimistic approach for the long term future of the business. Or the companies that have a product/service that would sell even if an apocalypse struck our streets. Times might be bad, but the good small businesses will always survive, no matter what the Optimism Index suggests.