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UPS Survey Takes Pulse of Small Business Owners


WEBWIRE

ATLANTA - Amid a steady stream of grim economic news, a large majority of small-business owners are optimistic about their company’s financial future, according to two nationwide surveys sponsored by UPS (NYSE: UPS).

In the first UPS Business Monitor United States, conducted between September and October last year, 91 percent of small-business owners or managers said they expect their company to be in the same or better financial shape in a year than it is today. A follow-up survey, conducted in mid-December after economic conditions worsened, showed only a small decline in the first survey’s optimism, with 86 percent of small-businesses owners expecting their company to be in the same or better financial shape in one year.

“Despite incredible changes in the economy, small businesses still see vibrant opportunities,” said Jim Beach, a professor of entrepreneurship at the University of Tennessee. “That eternal optimism and entrepreneurial spirit in the face of adversity is an asset that bodes well for the future of our economy.” (More comments from Jim Beach )

Importantly, this optimism is rooted in realism as small-business owners surveyed do not project a speedy economic recovery. In the first survey, almost half (47 percent) of small-business owners said they believe that the U.S. economy will begin to improve in 2010 or later. That number climbed to 67 percent in the December survey.

Small-business leaders also are optimistic about their workforce prospects. Two-thirds (66 percent) of respondents in the first survey said they plan to keep the same size workforce for the next 12 months. Almost one-quarter (24 percent) said they will increase their workforce; only 10 percent said they plan to reduce it. A greater number of small-business owners in the second survey expect their workforces to remain the same. Almost three-quarters (74 percent) said they expect their workforce to remain the same this year, 13 percent expect to increase their workforce and 12 percent said they plan to cut staff.

“Small businesses are the key to capitalism and to the job market,” noted Prof. Jeff Rosensweig of Emory University’s Goizueta Business School. “These UPS Business Monitors give us a great finger on the pulse of small business and these latest surveys give us reason to lighten the prevailing mood of ’gloom and doom.’” (More comments from Jeff Rosenweig )

Companies that trade are particularly optimistic
Small-business owners who engage in international trade were more likely to project that their business would be in a better economic position 12 months from now compared to those who did not. In the first survey, 56 percent of small-business owners who engage in cross-border trade expect their company to be in a better economic position in one year, compared to 41 percent of companies that did not trade. This gap widened in the second survey, with 62 percent of small-businesses owners who trade internationally expressing optimism compared to 39 percent of non-traders.

Despite this trade-related optimism, the majority of small businesses surveyed aren’t exporting. Almost three-quarters (73 percent) of respondents do not engage - and do not plan to engage - in international trade. Unfamiliarity with global markets, language barriers and apprehension about preparing customs and other documents were among the main reasons why small-business owners say they aren’t trading across borders.

“This survey shows that the vast majority of small-business owners are missing out on the key opportunities offered by international trade,” said Alan Gershenhorn, UPS senior vice president of worldwide sales and marketing. “By expanding opportunities in new markets, cross-border trade can help small businesses diversify, buffering them against risk, and helping them stay strong in tough times.”

Small-business owners may be particularly optimistic for one important reason: they love what they do. When asked in the first survey what else they would do if money were no object, more than one-third (37 percent) said they would continue running their businesses and 12 percent said they would invest more money in their companies. Only 13 percent said they would retire.

UPS (NYSE: UPS) is the world’s largest package delivery company and a global leader in supply chain and freight services. With more than a century of experience in transportation and logistics, UPS is a leading global trade expert equipped with a broad portfolio of solutions. Headquartered in Atlanta, Ga., UPS serves more than 200 countries and territories worldwide. The company can be found on the Web at UPS.com. To get UPS news direct, visit pressroom.ups.com/RSS.

About the UPS Business Monitor
The UPS Business Monitor is currently conducted in the United States, Canada, Latin America and Asia. It is a survey of small business decision-makers to monitor their opinions on a range of business issues. The UPS Business Monitor is as an important information resource to help UPS customers stay ahead of ever-changing business trends.

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Notes about the research:

Research was conducted by TNS, a world leader in market insight and information, using a business panel.

Download the executive summary .
Download the full report .

For the first survey:

* A total of 600 telephone interviews with small business establishments in the U.S. were conducted between Sept. 19 and Oct. 13, 2008:
o 200 interviews with companies who have 2-9 employees
o 200 interviews with companies who have 10-49 employees
o 200 interviews with companies who have 50-250 employees

For the second survey:

* A total of 151 telephone interviews with small business establishments in the U.S. were conducted from Dec. 15-19, 2008.
o 51 interviews with companies who have 2-9 employees
o 50 interviews with companies who have 10-49 employees
o 50 interviews with companies who have 50-250 employees

For both surveys:

* Respondents had to be extremely or very knowledgeable about their company’s overall economic position and had to be part of the decision-making process for the company.
* UPS was not identified as the sponsor of the survey
* The survey length was 11 minutes

About TNS
TNS is a global market insight and information group. Their strategic goal is to be recognized as the global leader in delivering value-added information and insights that help clients make more effective decisions. Through a network that extends across 70 countries, they are the world’s foremost provider of custom research and analysis, combining in-depth industry sector understanding with world-class expertise in the areas of new product development, segmentation and positioning research, brand and advertising research and stakeholder management. They are a major supplier of consumer panel, media intelligence and internet, TV and radio audience measurement services.



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