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Small-business owners still worried about economy

Saturday, July 23, 2011   (0 Comments)
Posted by: David Drennon, VP, Marketing+Business Development
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Small-business owners still worried about economy

Premium content from Phoenix Business Journal - by Lynn Ducey
Date: Friday, July 22, 2011, 3:00am MST

Small-business owners acknowledge the worst of the Great Recession’s effects may be over, but most aren’t ready to uncork the champagne just yet.

Two new studies of small-business confidence show most are keeping a guarded view of the economy and their prospects — at least for the short term.

Members of the Alternative Board, a Denver-based business-building organization, are optimistic about their own success, but worried about the economy in general, according to one recent poll.

Sixty-eight percent of the 1,350 members polled believe the overall economy will improve this year. Finding new customers, retaining existing ones, and developing sales strategies and marketing plans are the top challenges they face going forward, results show.

"I can see things here in Arizona that are signs of improvement. There is some activity in the real estate markets now where there hadn’t been any before. I think all of that will turn into a plus,” said Charles Van Cott, a partner with the law office of Stevens Van Cott PLLC.

The Scottsdale firm employs three people and focuses on estate law, family law, and wealth planning, probate, business and corporate work.

Scott Barclay, co-owner of Aspire Kids Sports Center in Chandler, takes a more pessimistic view.

"I am planning for things to get worse. I have to dig in,” he said. "I am conservative in my approach, and that’s why I think we are here today.”

Aspire Kids, which he founded in 1995 with his wife, Dona, operates a facility that serves as the home of the Arizona State University men’s gymnastics team and teaches youth a range of skills, including cheer, dance, gymnastics, martial arts, trampoline, tumbling and swimming. The business employs six full-time staff and 80 part-timers.

Van Cott and Barclay are members of the Alternative Board. Both said they are confident about their businesses, but the stagnant economy has not made it easy. Ongoing debates about the national debt ceiling in Congress and discussions about proposed tax increases and cuts also concern them.

"I am basically sitting on the sidelines waiting to see what happens. All of this gives us no assurance which way we are going to go right now,” Barclay said.

"I fear a currency crisis, and it’s beyond the control of anything that we can do in Arizona,” Van Cott said.

Those concerns are reflected in the Vistage CEO Confidence Index, a national survey of 1,719 small-business CEOs.

The index was 92.9 during the second quarter of this year, down significantly from 105.2 in the first quarter.

The index uses a baseline of 100, which represents a composite formula of all the survey responses. An index of more than 100 reveals a positive outlook, while lower numbers show a negative one.

Thirty-six percent of those polled by Vistage said economic uncertainty is one of the most significant business issues they are facing, which reflects the belief that the national economy is stagnating.

"If I felt that people were fighting for small business out there, I would be ready to go out on a limb. But right now, I can’t do that,” Barclay said.

David Drennon, spokesman for the Arizona Small Business Association, said an optimistic outlook with a cautious approach is key for small-business owners.

"Our members tell us they feel more positive about the economic outlook, and some are looking to begin adding jobs in the second half of 2011,” he said. "Financially, they are ready to commit, to innovate and to take managed risks.”

In a summer survey of 520 ASBA members, 71 percent said they expect to have a better financial outlook one year from now. More than one-third, 36 percent, expect to hire additional staff by the end of the year, and half of those say they will add staff within the next three months.

"These are resilient Arizona entrepreneurs who have endured this prolonged down economic period,” Drennon said.

As for Barclay and Van Cott, neither expects to add staff in the near future, but both say they are holding their own.

"Year to date, we are slightly up from last year — and last year wasn’t good. Anything up is good, but it’s not where we want to be,” Barclay said.

Van Cott said the upswing seems to have begun, but both men would like to see a faster economic rebound.

"2010 is an improvement over 2009. We’ve definitely moved up from there,” Van Cott said. "I am focused on moving month to month and making sure that we are paid ahead.”

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