The Wells Fargo/Gallup Small Business Index found that the optimism of small business owners in the U.S. dropped from a record high of +129 in the fourth quarter of 2018 to +106 in the first quarter of 2019. The survey was conducted on January 9-15, 2019 during the government shutdown.
The index revealed a decline in the percentage of respondents who reported an increase in revenue, those who expect a revenue increase in the coming months and those who positively view their current cash flow situation. In terms of financial preparedness, 75 percent are optimistic about their ability to handle economic problems, particularly those who have previous experience with a recession.
Some of the lessons learned from the last recession includes being frugal in terms of credit and spending, keeping the business viable and competitive, building capital reserves and anticipatory planning for next few years.
Despite the overall decline in optimism, around two-thirds of small business owners believe that 2019 will be a year of economic prosperity rather than one of economic difficulty. The current levels of optimism are still well above those measured during and after the recession in 2008.