Small Business

Main Street Gloom vs. Corner Office Cheer


The gulf between the outlooks of big and small companies; entrepreneurs are nearly as somber as they were a year ago

Optimism surveys show a gulf between big and small companies

Small-business owners are almost as glum as they were a year ago when talk of "green shoots" began. Sentiment has slipped since January, according to a monthly survey of members by the National Federation of Independent Business. The group's Optimism Index, which reflects sentiment on factors ranging from profit outlook to job openings, remains roughly where it has been for the past 18 months—levels that hadn't been seen since 1980.

Big-company CEOs have a rosier view. Surveys by the Business Roundtable and the Conference Board show their confidence bottomed out more than a year ago. Top executives have expressed more hope than fear for at least two quarters.

Big companies may be less exposed than smaller ones to lingering domestic problems, says Dane Stangler, a researcher at the Kauffman Foundation. "You see a lot of commercial real estate loans held by small banks, which are the banks that loan to small business," he says.

The bottom line: Bigger companies have better access to financing than small outfits, helping them overcome the residual effects of the recession.

Tozzi covers small business for Businessweek.com.

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