Press Releases

Uncertain Environment Prevented Growth And Hiring, Caused Business Owners To Dip Into Personal Or Retirement Savings

Washington, D.C., March 20, 2012 – The nation’s smallest businesses are still feeling negative effects of the economic downturn, including cash flow issues for business and family, according to a new survey by the National Association for the Self-Employed (NASE). Three-quarters of the self-employed and micro-businesses owners say their company provides the main source of income in their household. 

“Sadly, our survey re-enforces the idea that economic recovery is slow going and that 70% of survey respondents believe that current state of the economy has either shown no improvement or has worsened in the last 12 months,” stated Katie Vlietstra, Director of Government Affairs for NASE. “It is also evident from our survey that our members are perplexed at what they perceive as little action by Congress to put forth common sense ideas to address key issues related to the self-employed and micro-business community. For example, a permanent health insurance deduction, individual tax reform, and access to capital - three things that could significantly and positively impact the nation’s economy.”

When asked what their business experienced in the last 12 months, respondents said that they had to refrain from making improvements or growing, have experienced a significant decrease in sales and/or revenue, and had to utilize personal savings or retirement savings to address cash flow issues.

The self-employed and micro-businesses personal finances are often intertwined with their business finances. Survey respondents said their family has been affected in the following ways in the past 12 months: increase in credit card debt, utilization of personal savings or retirement savings, difficulty affording basic needs, like housing, utilities and food.

Eighty-one percent said they were not planning to hire full-time or part-time workers this year. When asked why, the top reason was that they had no need for additional help. Being unable to pay for the salary of an additional worker and being concerned about the current uncertainty in the economy were two other popular reasons respondents said they would not hire workers this year. 

Of those that are hiring, 63% would be looking for part-time employees. 

• No credit available for operating capital contrary to government claims programs. The only way to get loan is if you don't need it!
• I have had to file bankruptcy to keep my health insurance on myself and my employee.
• I have gone without pay.
• Selling my business is almost impossible so that I can retire.
• I took on a part time job that provides health benefits since I could no longer afford to pay for my own.
• I have experienced greater uncertainty about the status of my business. I have not been able to plan more than a few months ahead because my customers are unwilling to commit to contracts until the last minute.
• I've had to cut back on business travel.
• I've had to close the office and work from home.