In addition, 66 percent of the SMBs surveyed indicated that the economic slump has impacted their business, with 37 percent of respondents saying that business has been either “much worse” or “a little worse.” In fact, 79 percent of businesses surveyed do not plan to hire or add to their staff.
More than 40 percent of the SMBs surveyed reported that their profits declined compared to last year. Of those companies, 20 percent saw profit dips of more than 10 percent; and 21 percent experienced decreases of more than 25 percent. Three in 10 businesses (31 percent) said their profitability remained the same.
“Small businesses continue to be deeply affected and concerned by the economy,” said Neil Austrian, Chairman and CEO for Office Depot. “In addition to declining profits, small businesses are also worried about inflation, interest rates and qualifying for a bank loan.”
As a result of the challenging economic environment, 50 percent of the SMBs surveyed plan on making some alteration to their business strategy or plan in the next six months. The most cited adjustments include changes to: marketing strategy (30 percent); clientele (23 percent); new business philosophy (15 percent); and products and services (15 percent).