Economic Downturn

1. 1

   Forty-four (44) percent of small employers are spending more time at their business today
   than six months ago, 27 percent a lot more time. Forty-one (41) percent of those spending
   more time are doing so because the slowing economy means more matters to watch or attend
   to. Ten (10) percent are spending less time. Of the group spending less time, one-third
   blame a slowing economy saying they now have less to do.
   

2. 2

   Increased marketing and sales activity is a common strategy to combat an economic slowdown.
   However, this proves one of the least frequent approaches small business owners
   employ to combat a perceived economic slowdown. For example, a similar number decreased
   marketing and promotion due to an economic slowdown as increased it for the
   same reason.
   

3. 3

   Over the prior six months, small business owners are highly likely to have become more attentive
   to their cash flow and inventory status. Two-thirds now watch their cash flow more
   closely with 60 percent of that group attributing their action to a slowing economy. Of
   those with inventories, 52 percent have been watching them more closely. Forty-six (46)
   percent of those watching inventories more closely attribute their increased vigilance to a
   slowing economy.
   

4. 4

   Twenty (20) percent of small employers have reduced, postponed or cancelled a planned
   investment(s) or reinvestment(s) in the last six months, though 11 percent increased plans.
   A slowing economy is the primary reason for the curbed investment in over half of cases. An
   absence of finance is practically never mentioned as a reason for reducing investment.
   

5. 5

   Actions and behaviors stimulated by the economic slowdown or fear of a slowdown seem
   to fall roughly into cash, sales/marketing, and banking categories. But owners do not have a
   common plan or even an identifiable approach toward the slowing condition.
   

6. 6

   Small employers view the current status and immediate prospects for their businesses favorably
   much more often than they do for other businesses in the area. A slim majority
   think business activity in their firm remains strong. However, a plurality sees business activity
   in their area growing weaker.
   

7. 7

   Small employers who describe their current business activity as strong are less likely to make
   decisions based on a slowing economy than are those who think their business activity is soso
   or weak. Yet, owners who experience strong business activity have been hedging against
   an economic slowdown and often cite the slowdown as the primary reason for their action.
   

8. 8

   Seventy-five (75) percent of small employers watched the actions of the Federal Reserve
   Board over the last six months, though 11 percentage points watched distantly. As a result
   of the action they observed, 17 percent of Fed-watchers made a business decision. However,
   only a net 1 percent of the entire small employer population made an expansionary
   decision(s) directly based on action of the Federal Reserve Board.

Volume 8, Issue 1, 2008
ISSN 1534-8326

Willian J. Dennis, Jr.
NFIB Research Foundation

• 1Compared to six months ago, are you advertising or otherwise promoting your business today a lot more, a little more, a little less, a lot less, or has there been no change?
• 1aIs the most important reason for the promotion increase:?
• 1bIs the most important reason for the promotion reduction:?
• 2Compared to six months ago, are you personally spending a lot more time, a little more time, a little less time, or a lot less time courting customers or potential customers, or has there been no change?
• 2aIs the most important reason for the increase:?
• 3Compared to six months ago, is your entire firm putting a lot more emphasis on sales and selling, or a lot less emphasis on sales and selling, or has there been no change in selling efforts?
• 3aIs the reason for putting more emphasis on selling because:?
• 4Compared to six months ago, are you personally spending a lot more time working for the business, a little more time, a little less time, or a lot less time, or has there been no change?
• 4a(working for the business) Why? Is it because:?
• 4b(working for the business) Why? Is it because:?
• 5Compared to six months ago, are you watching your cash flow today a lot more carefully, a little more carefully, a little less carefully, or a lot less carefully, or has there been no change?
• 5a(cash flow) Why? Is it because:?
• 6Compared to six months ago, are you or someone on your behalf collecting your receivables a lot more aggressively today, a little more aggressively, a little less aggressively, a lot less aggressively, has there been no change, or are receivables really not applicable to your business?
• 6a(collecting receivables) Why are you doing that? Is it because:?
• 7Compared to six months ago, are you slowing payments to vendors today a lot more often, a little more often, a little less often, or a lot less often, or has there been no change?
• 8Compared to six months ago, are your overall selling prices generally a lot lower today, a little lower, a little higher, a lot higher, or has there been no change?
• 8a(selling prices) Is it because:?
• 8b(selling prices) Is it because:?
• 9Compared to six months ago, have your business operating hours increased a lot or a little; have they been reduced a little or a lot, or has there been no change?
• 9aDid you increase operating hours:?
• 9bDid you reduce operating hours:?
• 10Compared to six months ago, are you watching your inventory levels a lot more closely, a little more closely, a little less closely, or a lot less closely, has there been no change, or are inventories really not applicable to your business?
• 10aAre you watching your inventories more carefully because:?
• 11Including major purchases of plant, equipment, vehicles or land – have you reduced, postponed or cancelled plans that you had six months ago to invest or reinvest in this business substantially or a little, increased plans a little or substantially, plans have pretty much remained on schedule, or ...
• 11aDid you reduce, postpone, or cancel your planned increase investment because:?
• 11bDid you increase your planned investment because:?
• 12Compared to six months ago, is the total number of employees working for you today more or less, or is it the same? About how many more/less?
• 12aIs the primary reason for the smaller number of employees because of:?
• 13In the last six months, have you checked with your primary financial institution to determine if there could be any issues obtaining credit in the immediate future should borrowing become necessary?
• 14Is business activity in your local area:?
• 15Is business activity in your area getting:?
• 16Is your firm’s business activity:?
• 17Is your firm’s business activity getting:?
• 18Are 90 percent or more of your sales made to customers located within 50 miles of your business?
• 19Over the last six months or so, have you followed the activity of the Federal Reserve Board:?
• 19aIn the last six months have you made any business decisions as a direct result of action taken by the Federal Reserve Board?
• 19a1Is the tone of the decision or decisions you made based on Federal Reserve action to:?