The Future Looks Bright to Western Small Businesses but Not to Southern Firms

A recent national study reported on the opinions of small business managers and owners on how national and international issues could impact their businesses in the coming year and the results showed marked differences in separate regions of the country.


The International Profit Associates Small Business Research Board (IPA SBRB) reported on a regional basis for the first time and used attitudes about the direction of the economy, revenue predictions and hiring plans as key ingredients of the poll. More than 550 small business owners and senior managers participated.

Small business managers and owners in Western states displayed clearly the most confidence about prospects for the next 12 months, with a 45.9 Small Business Confidence Index (SBCI). Far less confidence was reported in the near term forecast for the South and Southeastern regional states, with a 38.2, according to the IPA SBRB poll results.

"We know there are strengths in the small business sector and we are hearing about predictions for growth through 2007. However, the most recent poll-- and specifically the regional breakouts-- give all of us a clearer picture about the diversity in attitudes," said Gregg Steinberg, President of International Profit Associates. "We now have a benchmark from which to move forward and begin determining critical changes within the regions."

Small businesses in the Northeastern part of the country had a IPA SBCI of 43.47 and the Midwest came in with 42.2.

The small business owners could come to agreement on the most important issues of concern that they all face, which include the cost of energy and materials and trying to contain and meet the increases in health care benefits. All regions also agreed that common goals for 2007 are to decrease expenses and increase revenue.

The confidence shown by the West's small business owners is based on revenue growth and increased hiring predictions. Over 63 percent of western respondents believe the next 12 months will produce higher revenues and 43 percent felt it would exceed 10 percent. Thirty-five percent also said hiring would increase in the coming year.

In contrast, the businesses in the south and southeast were not as optimistic and their outlook on the economy showed the least positive results, with 35.1 percent saying it would improve in the next 12 months and just under 57 percent indicating that they expect revenue to increase. Only 23.5 percent plan to increase hiring.

"While the overall national IPA SBCI was 42.7, it showed a boost in confidence of 3.4 points from the 39.3 index reported at the onset of the third quarter," added Steinberg. "As we have seen from previous years' polls, end of the year exuberance requires that small businesses be pro-active to transfer optimism into reality."

The IPA Small Business Research Board reports the opinions of small business owners and managers on a wide variety of topics that are related not only to their own businesses but also national and international issues that could impact their operations. The study results can be found at IPA is North America's largest privately-held provider of management consulting and professional services to small and medium-sized businesses (SMSB).

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