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Small businesses are expressing some optimism
July 17th, 2007

Small businesses are expressing some optimism

Companies are hiring to fill vacancies, learn to weather hard times

By Joyce M. Rosenberg

Associated Press

Published June 17, 2007

NEW YORK - Judging by the gyrations in stock and bond markets, investors are a pretty uneasy lot these days. That anxiety doesn't seem to be spreading among small-business owners.

Interviews with a sample of company owners show they're fairly upbeat, although the economy is slowing and interest rates show no sign of coming down.

Dennis O'Connor, owner of Paradigm Communications, a public relations firm in Natick, Mass., said his company went through a slow period last winter, but business has picked up. That's a good sign, not only for Paradigm, but also for its clients -- publicity and marketing are often the first casualties when nervous companies cut back.

``We had a couple of clients that went away due to budget issues -- they needed to hold back some of the money they had been spending,'' O'Connor said.

O'Connor responded to that dip by increasing his business development efforts, and he was pleased with the results: ``I feel confident that the clients we have will stay with us.''

Kel Kelly owns a marketing services agency, and like O'Connor she sees signs of optimism among her clients that naturally spills over to her company.

``Business is very strong, and we can see clients are releasing money and spending money and committing to programs and agency work,'' said Kelly, CEO of Kel & Partners in Hopkinton, Mass.

Kelly called business the strongest in years, and ``it's consistent across sectors -- tech, consumer and health care.''

The National Federation of Independent Business, which conducts a monthly survey of its members to determine their sentiments about the economy, said its Small Business Optimism Index edged up 0.4 percentage point to 97.2 in May, the first increase in four months. Optimism remains lower than at the start of the year, but NFIB chief economist William Dunkelberg put the reading in perspective, saying there is no sign of recession.

``It's just that things are slow right now, but things are picking up,'' Dunkelberg said.

He noted that businesses are hiring -- they might not be expanding their payrolls, but they are hiring to fill vacancies rather than leaving them open to cut costs.

Of course, small businesses in struggling industries, such as those related to the slumping housing market, aren't likely to be very optimistic. But in parts of the country, housing isn't hurting, and company owners are feeling good.

Rich Napier, president of Napier Signature Homes in Richmond, Va., said his business is improving because the local economy is strong, and people relocating to the area need of homes. He noted that interest rates, while higher than a few years ago, are still low by historical standards.

``Sales activity is picking up,'' he said. ``It was bad last fall through the first quarter of this year.''

Napier said he has negotiated three contracts for custom-built homes in the last six weeks, and he's seeing more interest in his inventory of already-built homes.

Napier, who's also president of the Homebuilders Association of Virginia, said that while the Northern Virginia housing market is slumping, other markets in the state are meeting or exceeding sales levels of last year.

``It is a pocketed market,'' he said of the industry nationwide.

One reason why many small-business owners are optimistic is because many have weathered hard times and have learned how to protect their companies in a downturn, or at least mitigate the damage.

Sean Bisceglia has just launched his third company, TalentDrive, a Chicago-based resume sourcing and screening service, and structured it so it can respond to changes in the business and economic environment without having to resort to draconian measures.

``I learned from experience,'' Bisceglia said.