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The Travails of Small-Business Owners

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The financial pages have been full of news lately about companies that are "too big to fail" -- but have managed to fail nonetheless. Less attention has gone to the struggles of small businesses. But they're hurting, too, and an American Express Open Small Business Monitor report published this month (analyzing survey data gathered in August) has lots of detail about their struggles and how they're trying to cope.

Among the small-business owners, 55 percent said they're experiencing cash-flow problems (up from 49 percent last fall). This helps explain a steep decline in the number who plan to make capital investments to grow their business over the next six months. Forty-three percent said they expect to make such outlays, down from 59 percent last fall. Forty-six percent said they'll "cut back or delay marketing expenses" as a way to conserve cash. Under the circumstances, it's not surprising to see a decline in the proportion of entrepreneurs who offer health coverage to their employees. In the new survey, 54 percent said they offer health benefits to their workers, down from 71 percent saying so last fall.

The current economy has also brought about a shift in entrepreneurs' priorities for their companies. In last fall's polling, growth was the foremost goal. Now, it's "maintaining their current business and sources of revenue." That dovetails with another of the new report's findings: Forty-nine percent said they're "willing to take a financial risk to grow their business," down from 57 percent last fall.