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Posts Tagged ‘economy’


Restaurant Owners Are Bullish on Their Industry

March 19th, 2013 ::

By Karen Axelton

Restaurant owners are feeling optimistic heading into the spring and summer seasons, and The National Restaurant Association’s latest Restaurant Performance Outlook reflects that enthusiasm, reaching a five-month high in the latest survey in January.

Restaurateurs’ outlook for same-store sales, capital spending and the economy as a whole all improved in January, pushing the RPI (a monthly composite index that tracks the health of the U.S. restaurant industry) to 100.6, up 1.0 percent from December and its highest level since August 2012.

An RPI above 100 means key industry indicators are in a period of expansion; an RPI below 100 means key industry indicators are contracting. The Index measures two components – both the Current Situation and the Expectations.

The Current Situation component measures current trends in same-store sales, traffic, labor and capital expenditures. The Expectations Index measures restaurant owners’ six-month outlook for same-store sales, employees, capital expenditures and business conditions. The Current Situation index was 99.7 percent, while the Expectations Index was 101.6—both an increase from the prior month.

Although there was a lot of uncertainty at the end of 2012 during the “fiscal cliff” standoff in Congress, restaurant operators’ outlook for sales growth has improved since then.  Forty-six percent of restaurant operators believe they will have higher sales in six months than during the same period in the previous year. That’s an increase from 37 percent last month, and the highest level measured in seven months.  Meanwhile, just 17 percent of restaurant operators believe their sales volume in six months will be lower than it was during the same period in the previous year—about the same as the 16 percent who felt that way last month.

Restaurant operators have a net positive outlook about the overall economy for the first time in four months.  Thirty percent of restaurant operators say they expect economic conditions will improve in six months, up from just 17 percent last month.  Twenty percent say they expect economic conditions to get worse in the next six months—a decline from 29 percent who said this last month.

Restaurant owners are planning to put their money where their mouths are, with more of them planning capital spending in the coming months. More than half (59 percent) say they will make capital expenditures for equipment, expansion or remodeling in the next six months, an increase from the 50 percent who reported such plans last month.

Image by Flickr user Willem! (Creative Commons)

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Posted in Marketing, Small Business, small business | No Comments »

Economy: Thumbs Down; Entrepreneurs: Thumbs Up

October 3rd, 2012 ::

By Rieva Lesonsky

“I can’t get no satisfaction,” Mick Jagger wailed in one of The Rolling Stones’ biggest hits. Maybe Jagger should try owning a small business. The results of a recent Gallup poll found that despite economic challenges, U.S. small business owners are thoroughly satisfied with their businesses.

The percentage of small business owners saying they are extremely (17 percent) or very (38 percent) satisfied with being a small business owner—a 12 percent jump compared to the third quarter of 2010. Another 29 percent of owners are somewhat satisfied—meaning that overall, a whopping 84 percent are satisfied. In comparison, just 16 percent of small business owners say they are not too (10 percent) or not at all (6 percent) satisfied with their businesses.

Since you could expect satisfaction to relate to a small business’s success, Gallup also asked the entrepreneurs how successful they believed their businesses were. Thirty-nine percent report feeling extremely or very successful, and more than half (51 percent) say they feel “somewhat” successful. That means 90 percent of small business owners think they’re successful to some degree.

Interestingly, in separate Gallup polls, small business owners have been expressing growing pessimism about the economy in general. This quarter’s Wells Fargo/Gallup Small Business Index showed small-business owners’ overall optimism had declined; Gallup’s Economic Confidence Index dropped too; and another Gallup poll found limited capital spending plans among small business owners.

Given these attitudes, why are entrepreneurs feeling so positive about their businesses? There are a couple reasons I can think of. First, small business owners are natural optimists—we wouldn’t start businesses otherwise. And even when we think the economy is in trouble and the government isn’t much help, we’re confident in our own abilities to get through the tough times.

Second, this attitude isn’t just braggadocio—it’s reality. We have gotten through tough times, and four years after the Great Recession hit, any small business owners who’s survived and thrived has a right to feel extremely proud of what he or she has accomplished.

However, there’s still a lot of ground to gain back. In 2007 (before the recession began), 47 percent of small business owners Gallup polled felt their businesses were extremely or very successful, compared to 39 percent today. But like the small businesses in Gallup’s survey, I’m confident that no matter what the coming months (and the presidential election) bring, America’s small business owners will stay positive about their futures.

Image by Flickr user openpad (Creative Commons)

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Posted in Entrepreneurs, Entrepreneurship, Entrepreneurship, Small Business, small business | No Comments »

Affluent Americans Feeling Optimistic About Economy

February 8th, 2012 ::

By Rieva Lesonsky

How are affluent Americans feeling about the economy in general, and their personal economic outlook, as 2012 gets well underway? Overall, affluent Americans are feeling good—in fact, as of December, 40 percent of them were optimistic about their economic outlook. That’s up from just 30 percent in September, and the highest level of optimism recorded in nearly six months by Ipsos Mendelsohn’s Affluent Barometer, a monthly online survey that tracks the lives, lifestyles and attitudes of 58.5 million adults with at least $100,000 in annual household income.

Ipsos says the increased optimism is partly due to perceived improvements in the job market and consumer spending. However, wealthy Americans aren’t entirely enthusiastic—some 37 percent are pessimistic about the nation’s economic outlook, primarily due to concerns about the federal government’s spending and its general dysfunction.

In fact, less than one-third (30 percent) of affluent Americans believe 2012 will be a good year for the overall U.S. economy. That may sound pathetic, but just 8 percent thought 2011 was a good year, so 30 percent is actually a substantial increase. Affluents are quite guarded about the prospects for a full economic recovery, with more than half (53 percent) saying they do not expect a full recovery until 2013 or later. And just 7 percent think the recession has already ended.

What about personal economic outlook? Here’s what affluent Americans said:

  • 56% said 2011 was a good year for themselves and their family
  • 38% said 2011 was good for their career/finances
  • Nearly two-thirds expect 2012 to be a good year for themselves and their family.
  • 54% expect 2012 to be a good year for their career/finances

 Is the increased positive outlook just a “holiday bump”? While traditionally, optimism in this survey has spiked in December compared to November, this year’s increase was fairly small–from 36 percent who were optimistic in November 2011 to 40 percent who felt that way in December 2011.

Overall, Ipsos notes, affluent consumers are feeling hopeful and making positive resolutions for 2012. Eight in 10 survey respondents said they had set goals for themselves in 2012, with the most common goals being spending more time with family, saving money, and living healthier lifestyles.

 

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Posted in Small Business, small business | 1 Comment »

Financial Execs Have Bleak Outlook for 2012

January 3rd, 2012 ::

By Karen Axelton

How’s the economic outlook for 2012? According to U.S. financial executives polled in the the latest Bank of America Merrill Lynch CFO Outlook survey, not too good.

Just 38 percent of those surveyed in the annual poll said they expect the U.S. economy to expand in 2012, down from 56 percent in last year’s survey and 66 percent in 2009. The CFOs now give the economy a score of 44 out of 100, down from last year’s score of 47 and equal to the lowest score in the survey’s 14-year history.

What specific expectations do CFOs have?

  • Some 56 percent expect revenues to grow in 2012, a decline from 64 percent last year.
  • Forty-one percent anticipate growth in profit margins, down from 55 percent last year.
  • Just 18 percent of CFOs expect to participate in a merger or acquisition in 2012, down from 26 percent a year ago.

What are their big concerns for 2012? Topping the list was the effectiveness of U.S. government leaders, cited as a concern by 70 percent of executives in the survey. Other major worries:

  • The U.S. budget deficit: 63 percent
  • Healthcare costs: 60 percent
  • Unemployment: 58 percent
  • Consumer confidence: 55 percent

When it comes to their own companies, the financial concern was healthcare costs, chosen by 56 percent of CFOs. Other top worries were energy costs and consumer confidence, both at 43 percent; cash flow at 42 percent; and revenue growth at 40 percent.

There is some good news in the survey. First, in spite of their pessimistic outlook, just 7 percent of respondents said they expect layoffs at their companies; 48 percent plan to maintain the same number of employees, and 46 percent said they expect to hire.

Another good sign: CFOs were more likely than last year to say lenders have expanded the amount of capital available to them. In addition, just 21 percent expect their cost of capital to increase, down from 27 percent last year.

How do these responses jibe with what you’re experiencing in your business?

Image by Flickr user Mykl Roventine (Creative Commons)

 

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Posted in Capital Access, Raising Capital, Small Business, small business, Workforce | No Comments »

What’s the Economic Outlook for 2012 and Beyond?

December 5th, 2011 ::

By Rieva Lesonsky

Wouldn’t it be nice if small business owners could feel some sense of certainty about the U.S. economy going forward? It would, but according to some of the nation’s top economic bloggers, the current uncertainty is going to continue. In fact, “uncertainty” might be the best we can hope for, because in The Kauffman Economic Outlook: A Quarterly Survey of Leading Economic Bloggers, Third Quarter 2011, bloggers expressed the most pessimistic view of the economy so far this year.

The quarterly survey polls top economics bloggers on current, short-term and longer-term economic conditions. In the most recent survey, 55 percent of respondents described the economy as “mixed,” while 33 percent think it is “facing recession.” Bloggers were also asked to choose from a long list of adjectives to describe the economy. The top choice? “Uncertain,” with “weak,” “fragile” and “vulnerable” also in the top five.

Does the picture get better as we look further ahead? Not really: Asked to look out three years into the future, over 60 percent of bloggers polled said they predict that both interest rates and inflation will increase or increase strongly. Only half of bloggers think that employment will grow in the next three years.

50 percent of respondents anticipate employment growth, a substantial drop from the 70 percent who expected employment growth in the second-quarter survey.

What about business in general? Conditions for business were rated “fair, bad or very bad” by over two-thirds of respondents. When it comes to financing for businesses, bloggers felt conditions are best in venture capital and angel capital, while bank lending was rated the worst.

On the plus side, almost half of respondents (44 percent) think that U.S. economic growth will reach a steady 2 percent annual rate. How could government help? The number-one recommendation among the bloggers was that government should cut regulation and fees that hinder formation of new businesses; 88 percent of respondents supported this idea.

Last, but not least, bloggers were polled about some predictions for the coming year. Thirty-five percent said the U.S. will enter a double-dip recession in 2012; 56 percent said they think President Obama will be re-elected; and just 21 percent think the U.S. unemployment rate will drop below 7 percent.

What do you think? Is your outlook for 2012 and beyond more, or less, negative than that of the Kauffman Economic Outlook bloggers?

Image by Flickr user Anderson Smith 2010 (Creative Commons)

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Posted in Small Business, small business | 2 Comments »

Luxury Is Hot Even Though Economy Is Not

October 14th, 2011 ::

By Rieva Lesonsky

A tough economy isn’t cutting into overall luxury fashion and accessories spending; in fact, it’s bringing some new consumers into the luxury fold, according to the latest 2011 Spend Sights Special Report: Global Luxury Fashion Spending from American Express Business Insights.

According to the report, while traditional, high-end luxury shoppers worldwide are slowing their spending, “average” consumers are picking up the slack. And both seniors and younger consumers are showing renewed interest in luxury products.

American Express identified the consumers who make up the top 5 percent of annual spending on luxury products. Dubbed “fashion enthusiasts,” this group’s spending patterns were compared to “average” luxury fashion consumers in the U.S., U.K., France, Japan, Hong Kong and Australia. Here’s what the survey found:

  • Average Consumers in the Lead – Compared to the same time period in 2010, average consumers are leading luxury fashion spending, outpacing “fashion enthusiasts” in the U.S., Europe and Asia. Non-enthusiast men in the U.S. spent 156 percent more on premium luxury fashion in 2011 compared to last year, and non-enthusiast women spent 125 percent more. In contrast, male enthusiasts in the U.S. spent 11 percent less, and female enthusiasts’ spend remained stagnant.
  • Seniors Get Into Flash Sales – Younger consumers may have been early adopters of flash sales (a limited-time, online sale frequently used for luxury products), but now seniors are getting into the game—and not just traditional fashion enthusiasts, either. Now, the average U.S. senior is getting in on the game. Non-enthusiast U.S. seniors’ spending on discount and flash sale websites increased by 124 percent in the first half of 2011 compared to the same period last year.
  • Average Gen Y and Gen X Go Premium – In comparison to discount luxury spending such as flash sales, premium luxury means paying full price. Surprisingly in a tough economy, the survey showed that more non-enthusiast Gen Y and Gen X consumers are making luxury brand fashion purchases. Average Gen Y consumers’ premium luxury spending increased by 100 percent during the first half of 2011 compared to the same period in 2010. Average Gen X consumers’ premium luxury spending increased by 142 percent during the same period. In comparison, premium luxury spending by both Gen Y and Gen X fashion enthusiasts decreased during that time period.

What does it mean if your business relies on luxury products? More luxury retailers are looking to woo slow-spending traditional enthusiast consumers by adding discounts such as flash sales. Along the way, they seem to be attracting average consumers who get hooked on luxury—even if it’s not at a discount.

Image by Flickr user UggBoyUggGirl [PHOTO//WORLD//TRAVEL] (Creative Commons)

 

 

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How to Keep Tabs on the Economic Measures That Matter to Your Small Business

August 31st, 2011 ::

By Rieva Lesonsky

These days, the economy is on a wild ride, and pundits and news outlets are all watching economic indicators with bated breath. But what economic indicators really matter to your small business, and how can you keep track of them yourself to make sure you don’t miss a trick? Here are 5 resources you can use to keep your pulse on the economy.

Consumer Confidence: When confidence is higher, consumers tend to spend more, so keeping track of this measure can help you know when to expect more business or, conversely, cut back on inventory and offer more discounts. One good source of consumer confidence measure is The Conference Board.

Employment Data: You’ll hear statistics about layoffs and job creation announced by all major news outlets, but you can also find monthly employment data online at the Bureau of Labor Statistics. For many small businesses, an even more important measure is local employment data, which you can find at the BLS site as well.

Real Personal Consumption Expenditures: To learn whether consumers are spending and see trends in spending, you’ll want to check this indicator, released by the Bureau of Economic Analysis.

Producer Price Index: Particularly important to manufacturers or those who purchase products for resale, this indicator tracks the cost of materials used in manufacturing. Following it will give you early warning if your costs for materials—or for products you buy from manufacturers—are likely to increase. Get the data from the Bureau of Labor Statistics.

U.S. Dollar Value: When the dollar declines in relation to other currencies, U.S. exports are likely to sell better; at the same time, prices in the U.S. will porbably rise since manufacturers will be paying more for anything they source outside the U.S. This information is also widely reported in daily news, but you can also get it from The U.S. Dollar Index Futures.

Image by Flickr user Horia Varlan (Creative Commons)

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Global Economic Outlook: Small Business Owners Are Optimistic

July 5th, 2011 ::

By Maria Valdez Haubrich

With the 4th of July just behind us, what are American entrepreneurs—and those around the world—thinking about their prospects for the coming months? The latest Global Entrepreneur Indicator survey has some good news.

The Global Entrepreneur Indicator is a quarterly survey of the members of the Entrepreneurs’ Organization, a nonprofit for business owners who have more than $1 million (US) in annual revenue. The June 2011 survey of more than 7,500 entrepreneurs in 38 countries found the global economic outlook is getting more positive.

In the most recent survey (June 2011), 62 percent experienced an increase in their net profits — a 25 percent increase over the previous year, when just 37 percent saw an increase.

As for job creation, as of June 2011 more than half (57 percent) had added jobs since they were last surveyed (in November 2010). That was also an increase from the 42 percent who had added jobs as of June 2010.

The news got even better when entrepreneurs surveyed were asked their predictions for the next six months. More than three-quarters (78 percent) expected their net profits to improve in that time frame; 68 percent expect to add jobs; and 61 percent expect both the global and local economy to improve.

Keep in mind, however, that this is a global survey—and the picture isn’t quite as rosy for U.S. entrepreneurs as for those in some other nations. In the U.S., 59 percent of entrepreneurs expected the local and global economy to improve in the next six months—the same percentage as in Europe and the Middle East. In Latin America/the Caribbean, however, 74 percent expected improvement, and in Canada, an astounding 91 percent did.

The least optimistic nation? Asia, where 56 percent expected to see the economy improve within six months.

Image by Flickr user Matt P. (Creative Commons)

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How Confident Are Consumers Feeling These Days? Not Very

June 29th, 2011 ::

By Rieva Lesonsky

With gas prices at record levels, the cost of food and other necessities on the rise and the job outlook still far from positive, perhaps it’s no wonder that BIG Research’s latest Consumer Actions & Intentions Survey shows consumer sentiment is stagnating.

Just 27.8% of more than 8,000 consumers surveyed earlier this month say they are very confident or confident in chances for a strong economy. That figure is even with May’s and lower than the same month in 2010 or 2009 surveys. More than half predict layoff levels to stay the same in the next six months, although just 3.4 percent of those with jobs are personally worried about losing them.

With their personal financial outlooks not improving, consumers are focusing on needs, not wants, when they do shop.  Almost half (48.5%) say they’ve become more sensible and realistic in their purchasing, up from 44.8% in May. In fact, BIG says this is the highest June reading in the survey’s history.

Of course, one key reason for the practicality is rising pump prices. Nearly 80 percent (77.9%) say gas costs are having a major impact on their household budgets. To deal with the increase, consumers are taking fewer shopping trips (45.6%), shopping closer to home (43.4%), seeking bargains (42.8%) and using coupons more frequently (40.5%).

On the plus side, consumers apparently need a lot of things, as BIG’s 90 Day Outlook for what consumers plan to buy in the next 90 days is looking up compared to May and compared to June of 2010 and 2009. There’s one glaring exception: Consumer plans to eat out are down from a year ago. That makes sense, as dining out is typically the first area where many people cut back when times are tough.

In particular, big-ticket purchase plans are a bright spot in the survey. The percentage of consumers planning to buy cars, computers, furniture, jewelry, mobile devices,TV sets and vacation travel in the next 6 months all rose compared to a year ago—as did the percentage planning home purchases or major home improvements. However, keep in mind that fewer than 15 percent of consumers plan to buy any of these items in the next 6 months.

With summer upon us, consumers may need to prepare with seasonal clothes, furniture and other items. Use seasonal marketing to grab their dollars while you can, and emphasize practicality, usefulness and value in your marketing message.

Image by Flickr user The Consumerist (Creative Commons)

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5 Reasons Owning a Business in a Down Economy Absolutely Makes Sense

June 3rd, 2010 ::

There’s a certain sense that during a recession, running your own business may not be a good deal. When things aren’t great, the idea is that you want a job where someone else has the responsibility of paying you. But that’s not necessarily a more secure way to ride out a down economy — a business can be a much better bet.

  1. You can’t be fired. When a big business isn’t doing so well, one of the key methods to cutting cots is laying off some personnel. But if you’re running your own business, you can’t be fired. You can choose to take a pay cut, of course, or fire an employee (if you’ve hired any), but short of closing or selling the business, you’re guaranteed a job. There’s no employer who can offer similar security.
  2. You can choose where to make the cuts. In a business where budget cuts are made above your pay grade, the decision maker may not know enough of what’s going on in the day-to-day operations to make the right budget cuts. If it’s your business, though, you can make sure that the expenses that actually directly help you bring in money aren’t eliminated. More often than not, a big business will make cuts across the board, which isn’t actually practical when you consider some expenses are more important than others.
  3. Your personal expenses can be more manageable. When you’re the boss, you decide the dress code, determine whether you can work from home and make other choices that can reduce your personal bottom line. You can save both you and your business money. If you want to use a home office to save expenses (like transportation costs), you have that option without having to convince an employer or manager.
  4. You can implement money-saving decisions faster. Found a better way of doing things? You can roll out a new system faster when you’re in charge of the business than when you need to get the office bureaucracy to agree with you. That can mean switching to a new vendor or ending a lease. That makes an owner-driven business more agile — which is absolutely necessary when the economy isn’t so hot.
  5. You have more room to negotiate. If you’re expected to meet the needs of an employer, you can’t necessarily make agreements that can get you the lowest possible price now, such as by negotiating a longer contract. Companies with many employees typically have policies in place that are harder to change and all employees are expected to follow, whether or not those decisions make the company less able to adapt.

Of course, all of this comes down to owning the right business. Selling real estate may not actually be a good bet, as far as running your own business goes. And you’ll have to work hard to enjoy security as an entrepreneur. But you can have a more stable business during a down economy than you might think.

Image by Flickr user Coyotejack

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Posted in small business | 3 Comments »