Sage Detects Brighter Outlook among Small Businesses

Small business owners are increasingly upbeat in their economic outlook, according to accounting software developer Sage.

The most recent Sage Business Index survey polled 10,000 businesses worldwide, including over 1,900 businesses in the U.S. When asked about their business prospects over the next six months, American respondents were overwhelmingly positive with an index value of 61.07, a sizeable increase from the 55.31 index value from the summer of 2011 (Indexes are based on a scale where zero to 50 is negative and 50 to 100 is positive).

In contrast, businesses in Canada and the U.K. also showed a positive trend in confidence in their own business, while those in Germany remained unchanged and those in France, Austria and Spain were less confident compared to last year.

In addition, American business owners have become more positive about the economic prospects for the U.S. overall in the next six months, with an index value of 49.28 compared to 41.57 in the summer of 2011. American business owners are less upbeat about the outlook for the global economy with an index result of 42.72, marginally above the 41.53 result from last summer.

"Small businesses continue to be the driver of the U.S. economy and it is inspiring that business owners are confident in their prospects," said Connie Certusi, executive vice president of Sage Small Business Accounting, in a statement. "With that said, many business owners have legitimate concerns about the variables that can impact their bottom line, namely the rising cost of energy, raw goods and inflation. Small business owners are always more vulnerable to these concerns so it is wise to be mindful of the challenges that these businesses will continue to face in 2012. The findings of the Sage Business Index continue to echo the concerns of most businesses."

The survey also found that while American businesses are upbeat about their own business prospects, concerns remain about inflation, along with the rising cost of energy, fuel and raw materials. Fifty-four percent of the U.S. respondents to the survey cited inflation and the rising costs of energy and raw goods as one of the biggest concerns they have for their businesses.

Thirty-eight percent of U.S. business owners said they are also concerned about the instability and/or uncertainty in their local economic market and while 30 percent were concerned about decreased consumer confidence. Cash flow also remains a continuing concern among 24 percent of those surveyed.

When asked about the role customer service has played in the recent difficult economic times, 55 percent of the respondents considered customer service to be more important in their operations over the last 12 months. Thirty-nine percent of the respondents said they are committing more budget or resources towards delivering customer service, while 35 percent will not.

The Sage Business Index survey was conducted as part of a multi-country research program by Sage which sought the views and recommendations of small businesses in the U.S., Canada, France, Germany, Spain, Austria, the United Kingdom, South Africa and Malaysia/Singapore. It has a U.S. sample size of 1,947 with a 95 percent confidence level and an error rate of +/- 2 percent.

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