Women business owners are overall more optimistic that the U.S. economy is recovering, according to the Key4Women Confidence Index released Tuesday.
The findings indicate that women business owners were starting from a more secure position in April 2011 as compared with 2010, and they were cautiously optimistic about additional economic improvements.
The index, which is designed to investigate how women-owned firms are faring in the larger economy, is conducted in the spring and fall each year to track trends on specific variables of importance to business sustainability and growth.
The current survey for the index was conducted from late April to mid-May with some 160 women business owners who are members of the W-Biz Insight panel, a diverse group of women business owners whose companies have annual revenues from less than $25,000 to more than $15 million.
Employment Treads Water
The semi-annual Key4Women index, which takes a 12-month retrospective and forward view, appeared the same day the National Federation of Independent Business (NFIB) reported that its monthly Small Business Optimism Index fell slightly in May, the third consecutive decline as the economy struggles to recover. It said job market indicators continued to deteriorate,capital spending plans and inventory investment plans all weakened and inflation continued to rise.
Some of these results mirrored responses from women business owners. According to the NFIB, small firms experienced virtually zero employment change over the past three months. For respondents to the Key4Women survey, the employment picture showed little change from Q1 2010 to Q1 2011. Only 14% reported increasing employment, while 11% reported decreasing the number of employees.
However, 41.5% of women business owners reported that they plan to increase their number of employees during the next 12 months, with only 4.9% reporting plans to decrease employment. And 53.7% planned to keep their number of employees the same.
In the shorter term, the NFIB found that 13% of small business owners planned to increase employment over the next three months, and 8% planned to reduce their workforce.
Both the Key4Women and the NFIB indexes identified poor sales as the single most important problem facing their businesses today: 31% and 25%, respectively. Women business owners also cited competition from large businesses (17%) and taxes (10%).
When asked about the most important thing they have learned about running their businesses over the past year, many women business owners cited issues related to cash flow, yet about 54% said they had not applied for any credit in the previous six months. Of those who did seek credit, 12% said they had received all the credit they had wanted, and 19% reported receiving most or some of what they had wanted.
The survey found that women business owners are becoming more conservative in their fiscal management, from managing cash flow, watching costs, controlling inventory and staying on top of receivables to evaluating pricing strategies or lowering overhead.
Over the past year, most women business owners have made significant investments to their businesses, whether it was increased marketing or advertisements (57%), creating new products and services (55%) or investing in technology (37%).
Key4Women is a KeyBank program dedicated to helping women business owners achieve success by providing them access to capital, customized solutions, ongoing education, and networking opportunities.KeyBank partners with the Center for Women’s Business Research on the Key4Women Confidence Index.