By Luanne Teoh on 08-04-2011

Based on the Q2 2011 Small Business Outlook report produced by Visa, the economic outlook for small businesses seem to be a mixed bag. While the overall profit outlook declined from 25%  in Q2 2010 to 23% for Q2 2011, small business owners outlook on collection has improved steadily over the past year. In Q2 2010, 32% of respondents reported that they would have difficulty with collections. This year for Q2 2011, that number dropped to 25%.

Although the numbers seem to be dropping and is showing a more positive outlook, the top 3 concerns of small business over the last four quarters remain the same:

• Cost of health insurance
• Attracting new customers and
• Rising taxes

Two out of the three factors relating to government influence continue to cause anxiety amongst small business owners.

Even though the numbers have improved when compared to the same time last year, of paramount concern amongst small business is the recovery from the recession.

Other top small business trends we should know about:

1. Economic confidence dips slightly in 2Q11 as seen via decreased confidence in revenue increases and greater profits.

Last quarter, small business owners’ confidence in near-term growth was at its highest since the recession began. However, slightly lower confidence in revenue increases and greater profits this quarter may indicate that small business owners are no longer as certain about immediate economic recovery. Despite these declines in key categories, concerns with collections and managing cash flow remained relatively stable. So, while small business owners’ outlook on growth may not appear as optimistic, this shift may also be a sign they’re continuing to adjust to life in a post-recession economy.

2. Energy expenses and economic recovery remain top concerns.

As many small business owners focus on rebuilding their businesses, uncertainty with overhead costs, especially energy prices, can be a limiting factor. In 1Q11, concern over energy prices reached an all-time high, and while down significantly in this quarter, it remains significantly higher than just two quarters ago. This renewed focus on energy costs is likely driven by recent fluctuations in oil and gas prices. But business owners’ top concern by far — recovery from the recession — could be driving many other concerns.

3. Business owners appear to believe job growth is on the horizon.

A possible sign that small business owners remain optimistic about future growth can be seen in their shifting attitude toward hiring and keeping good employees. In 2Q11, the number of small business owners expecting to lay off employees reached an all-time low while those expecting to hire new employees and increase pay for current employees rose. This renewed emphasis on finding and retaining qualified employees could be an indicator that business owners are expecting improvements in the job market

4. Financial institutions have an opportunity to strengthen customer relationships by providing financial and marketing consulting.

In 2Q11, only 14 percent of small business owners reported they plan to borrow money. Instead, many small business owners are looking to their financial institutions for other forms of support, including financial and marketing consulting. Financial institutions may also view this shift as an opportunity to strengthen relationships with these customers by promoting products and services beyond lines of credit.

Link to the full report by Visa

About Luanne Teoh

Luanne is a senior correspondent for BizTechDay focused on Small Business Tech, Mobile and China based in San Francisco. In the last 17 years, she has helped launch start-ups and turned around failing operations. Her international work experience include both public and private corporations in Southeast Asia, Australia and North America. She has previously worked for Oracle Corporation, SonyBMG Music, Universal Music, Catcha Media and SOH Inc. Apart from a keen interest in technology, Luanne is also and avid explorer of the globe, cultures and people.

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