Sales dip uneven for small businesses

Survey finds concern about slower growth, but some thrive

January 13, 2001|By Andrea K. Walker | Andrea K. Walker,SUN STAFF

Small businesses are worrying about the effects of a cooling economy even as profit margins for most remain relatively healthy, according to a national survey.

The survey of 534 businesses by the National Federation of Independent Business Education Fund found that small businesses haven't been exempt from the nation's economic slowdown.

While 20 percent of respondents reported increased earnings in December, 35 percent saw a decline. Twenty-nine percent reported lower sales, compared with 25 percent who saw an increase.

More than a quarter of small business owners expect even worse in the coming months.

"The economy has not slowed down to the point where businesses are cutting hiring but they're pretty pessimistic about the future," said Aaron Taylor, a spokesman for the NFIB.

Industry experts acknowledge the slowdown, but say that many small businesses remain viable.

"We understand that there has been a slight downturn, but small businesses are still having success accessing capital and we continue to be optimistic," said Allan Stephenson, Baltimore district director of the U.S. Small Business Administration.

The outlook is even brighter in Maryland, where 97 percent of businesses are small and the economy has remained stronger than the rest of the nation. According to the most recent figures by the SBA, there were 309,300 small businesses in Maryland in 1998.

Still, the area's small businesses say a shaky stock market, high energy prices and last year's uncertain presidential election has caused them to make more conservative business decisions.

Sonny Morstein, the owner of 103-year-old Morstein's Jewelers and chairman of the Baltimore City Council Ad-Hoc Committee on Small Business, said local business owners have indicated they are feeling the slowdown. He noted, though, that the last few years were exceptionally strong for the U.S. economy.

"This year was more realistic," Morstein said. "We've been in the business long enough that we know there are periods of great prosperity and periods that are slower. You have to learn to react to that."

Generally, Baltimore's small businesses are in pretty good shape, though they may tighten their belts some.

Morstein, for instance, will probably buy less at his next jewelry show. "We're all probably spending less and looking for a better bargain," he said.

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