California Business Minute™

Hi, I am Tim Johnson and welcome to the California Business Minute.  The following

is the latest edition (March) of the citibank California Small Business Survey.

"Though a growing number of economic indicators point to an improving economy, the
latest Citibank small business survey indicates otherwise. An overwhelming majority
(79 percent) of California small business owners say they believe current business
conditions are only fair or poor, while 45 percent say their own business condition
is worse off than it was a year ago. At the same time, however, a majority (55 percent)
of small business owners in California say their business has performed better than
they expected. Looking ahead, 44 percent say they expect their business will be better
off in the next 12 months, expressing a tempered level of optimism.

While small business owners have typically led the economy out of recessions, only
21 percent of California small businesses expect to increase their number of full-time
employees in the next 12 months. This lack of hiring is being driven by uncertainty
about the economy in general (80 percent), a belief that they have the right number
of employees for their current business volume (79 percent), uncertainty about how
their business will do over the next 12 months (81 percent) and diminished sales
(74 percent).

When asked what would encourage them to hire additional employees, the majority of
California small business owners said an increase in their business volume (88 percent)
or an improved general business climate (83 percent). Sixty-two percent would be
encouraged to hire if they receive a permanent reduction of their payroll tax rates
or if their state, local, sales or property taxes were reduced (55 percent).

California’s Entrepreneurial Spirit Thrives Despite Recession

And despite the challenging environment, the survey showed that California small
business owners remain firm believers in owning and running a business. Seventy-three
percent of respondents say they would start their business again, even if they knew
then what they know now about the challenges they would face, and 57 percent would
recommend small business as a career to their children."

Among the survey’s other key findings in California:

• 64 percent say the recession has “forever changed” how they run their business
• 47 percent say “my business is surviving and things are somewhat better than
        I expected” vs. 37 percent who say “my business is struggling and worse than
        I expected.”
• Respondents cite increase in sales (36 percent) and improving economy
        (14 percent) as the top factors needed to improve their business performance
        over the next 12 months.

This Citibank poll was conducted via telephone by Abt SRBI during the period
March 10 - March 31, 2010 among a national random sample of 552 small businesses,
with revenue over $100,000 and no more than 100 employees.

I am Tim Johnson and this has been the California Business Minute.