- Mark Dolliver

One key constituency in the economy remains to be convinced that the bad times are over. Polling in October for the latest Discover Small Business Watch report finds economic confidence among small-business owners is still low, with little sign of upward movement.

Fifty-five percent of the owners surveyed rated the economy as poor, up two percentage points from Discover's September report. And 44 percent said it's getting worse, easily outnumbering the 35 percent who said it's getting better. Looking more specifically at economic conditions for their own businesses, 29 percent see them improving (unchanged from September), but 43 percent see them worsening (down two points from September).

It's not as if the survey's entrepreneurs think the small-business sector is lagging behind the rest of the economy. Indeed, 53 percent say small business will lead the overall economy out of the recession, while 29 percent think small business will trail the recovery.

And when might that recovery occur? The poll's respondents aren't holding their breath, as half of them think "it will be more than 12 months before most people feel that the economy has stabilized." A more upbeat 28 percent think the recovery will be evident in six to 12 months, and another 13 percent think it could be apparent in less than six months.

Given the respondents' glum outlook on the economy, it's unsurprising that there's scant enthusiasm for spending on business development (including advertising). While 23 percent said they expect to increase such investment in the next six months, 44 percent expect to decrease those outlays.

It doesn't help matters, of course, that it's tough for small businesses to get access to capital these days. Forty percent of respondents said it's "very likely" they'll need to tap into their personal assets during the next 12 months to keep their business going, with another 21 percent saying this eventuality is "somewhat likely." If you have a friend or relative who owns a small business, get ready to flee if this person starts discussing finances: 31 percent of respondents said it's at least somewhat likely that they'll borrow from friends or relatives to keep their business afloat. And don't try diverting them to the Small Business Administration instead, as 90 percent said they've never even applied for an SBA loan.

You'd think one saving grace of the recession, with its high mortality rate for small businesses, would be a reduction in the amount of competition that surviving companies face. However, when asked about the amount of competition they encounter, 25 percent said it has increased during the past six months, vs. 18 percent saying it has decreased (with the rest saying it has stayed about the same).