In yet another indicator that small business confidence appears to be waning, small business confidence plummeted in June according to a recent survey.
Small business confidence, based on the number of small business owners describing themselves as optimistic about the economy, dropped a surprising 24 percent, according to a survey by SurePayroll, an online payroll service provider for small businesses.
"We've seen slow hiring and rising salary costs in recent months, leading indicators of an inflationary environment," Michael Alter, president of SurePayroll, said in a statement. "But we had no idea how radical the effect would be on the spirit of the small business owners. Many have quickly gone from the height of optimism to believing the bottom's falling out - and that's scary."
Based on the June survey, 59 percent of respondents indicated they are optimistic about the economy, while 41 percent said that they are pessimistic about the economy.
That's a significant drop in optimism relative to SurePayroll's May survey, in which 78 percent responded that they felt optimistic about the small business economy and 22 percent said that they were pessimistic.
Nearly two-thirds, or 63 percent, of respondents believe inflation will have a negative impact on their business in 2006.
Fifty-three percent of those surveyed have seen their costs of doing business rise over the last several months.
Of those businesses that have incurred increasing supply costs, 79 percent have not raised their prices to pass along their increasing expenses to their customers.
However, 35 percent of those respondents are contemplating raising their prices in the future. In contrast, only 9 percent of those who have not experienced supply cost increases are contemplating raising prices, according to the survey.
SurePayroll surveyed 208 small business owners between June 12 and June 15.