With sales down and unlikely to pick up any time soon, business owners are slashing staffs and inventories in an attempt to keep their companies afloat.
February was a rough month for small business owners: The National Federation of Independent Business's "optimism index" plunged to its second-lowest level in the monthly survey's 35-year history."It is clear that the first quarter of 2009 will be as bad as the fourth quarter of last year," NFIB Chief Economist William Dunkelberg said in a statement accompanying the report.
Business owners are coping with slow sales by liquidating inventory, deferring capital investments and. Seasonally adjusted, the decline in the average number of workers employed by surveyed businesses over the past three months is the largest in the survey's history. NFIB, headquartered in Washington, D.C., based its February survey results on a poll of 800 of its members, who include small business owners around the U.S.
Even more ominous is their outlook: This typically upbeat segment of the economy is bracing for the climate to worsen. Expectations that sales will increase in the next few months have plummeted since January, falling to the worst reading the survey has ever recorded.
Valerie Breslow, president, believes her business will weather the storm, but it's been battered by the recession.
"I'm optimistic long term, but short term I have no idea," she says. "This economy has flummoxed me - I've never seen anything like it."