Small business owners remain cautious, thrifty

 NEW YORK (AP) — Small business owners are keeping a cautious approach to running their companies even as they grow more optimistic.


Two surveys released Tuesday, one by Wells Fargo & Co. and the other by Bank of America Corp., found many owners still have conservative hiring plans and little appetite for loans.

Stronger revenue and cash flow are behind the increasing optimism. In the Bank of America spring survey, 68 percent of owners said they expect revenue to increase in the next 12 months. They feel confident about their local economies but have their eye on national and international issues that could affect their businesses.

About three-quarters cited health care costs and the federal government’s effectiveness, or lack thereof, as potential problems. Seventy percent are concerned about higher commodities prices.

Wells Fargo’s second-quarter Small Business Index rose to 47 from the first quarter’s 45, its highest level since the second quarter of 2008, before the financial meltdown. That was still far below the high of 114 hit in December 2006, but much better than the minus 28 posted in the third quarter of 2010.

The Wells Fargo survey found owners are gradually getting more optimistic about the prospects for their companies’ financial situation a year from now. Sixty-seven percent forecast their businesses would be in good shape, up from 66 percent in the first quarter. Fifty-nine percent expect their cash flow to be good over the next year, up from 57 percent.

The Wells Fargo survey and Bank of America’s are in line with other recent reports that show owners’ confidence slowly improving.

Both surveys found owners willing to hire. In the Wells Fargo survey, 21 percent plan to hire in the next 12 months, little changed from 22 percent in the first quarter. A larger number of owners in the Bank of America survey, 52 percent, said they were willing to hire, a jump of 21 percentage points.

The Bank of America survey questioned 1,000 small business owners during March. The Wells Fargo survey questioned 600 owners from March 31 to April 4.