Riverwoods, Illinois, August 28, 2006
– Discover Business Card released the results
of the inaugural Discover
® Small Business
Watch
SM today, a new monthly Index
of economic confidence of the nation's 22 million
small businesses with five or fewer employees.
Among the key findings, the survey
found that small business owners are more optimistic
about the current state of the economy when compared
to the general population, with 39 percent of
small business owners rating the economy as ‘excellent'
or ‘good,' versus the 34 percent for the general
population. However, nearly 60 percent of small
business owners surveyed felt that economic conditions
in the country are getting worse.
The
Discover Small Business Watch will measure the
relative economic confidence of U.S. small businesses
each month with a numerical Index, generated by
assessing small business owners' responses to
a set of six identical questions. The Discover
Small Business Watch for August 2006 represents
a baseline of 100, against which future surveys
will be compared. Surveys conducted in tandem
with each month's Watch will also examine small
business viewpoints as well as consumer purchasing
behavior and attitudes towards small businesses.
“By providing a reliable barometer of
economic confidence among small businesses with
five or fewer employees, the Discover Small Business
Watch seeks to give a voice to this frequently-overlooked
but critical sector of today's economy. This rarely
surveyed segment produces more than a trillion
dollars in annual revenues,” said Sastry Rachakonda,
Director, Discover Business Card. “We believe
small businesses are often the earliest to foretell
future economic trends, so the Watch is expected
to serve as an important economic indicator for
not just this segment but of the U.S. economy
overall.”
Small Business Owners
Committed to Remaining Small and “Will Never Retire”
In addition to measuring economic confidence,
the Discover Small Business Watch is designed
to provide insights into what drives small business
owners and into the contrast between the operations
and techniques of small companies versus large
businesses. Some of the key survey findings this
month include:
- Small Businesses Want
To Remain Small: Nearly two-thirds, or 67
percent, of small business owners said they would
rather have their company remain small than have
it grow into a big business.
- Priorities
about Retirement and Business Succession Vary:
Almost half of small business owners (42 percent)
said they have no current plans to retire, while
close to a quarter (22 percent) indicated that
they plan to close their business upon retirement
rather than sell it or hire a manager. Sixteen
percent plan to transfer ownership to a family
member.
- Cash Flow an Issue: Nearly
40 percent of small business owners surveyed indicated
that their business encountered temporary cash
flow issues over the past 90 days causing them
to hold off on paying certain bills.
Rachakonda
continued: “This is clearly a unique segment with
a distinct mindset. The Discover Small Business
Watch is an important part of Discover's efforts
to understand and serve America's small business
owners. The small business payments and financing
space has been underserved for years and the Watch
is a part of our commitment to meet the unique
needs of this segment and to innovate and transform
the way small businesses pay for and finance their
everyday purchases.”
Consumers
See Small Businesses as Leaders in Customer Service
and Quality; Engine of Economic Growth
In addition to polls of small business
owners, Discover will poll U.S. consumers each
month to gauge the role small businesses play
in their daily lives. The findings from the August
survey suggest that consumers see small businesses
as a vital and ubiquitous component of the U.S.
economy.
- Leaders in Customer
Care and Quality: Sixty seven percent of
consumers surveyed noted that those who are self-employed
or own their own business typically provide better
customer service than large companies. Seventy
percent of consumers surveyed said they were very
satisfied with the quality of the product or services
they purchased from small businesses.
- Driving
Today's Economy: Nearly six in 10 consumers
have purchased a product or used a household or
personal service provided by a small business
in the past three months. A similar 60 percent
indicated that they have close friends or relatives
who are self-employed or who own a small business.
Fifty nine percent revealed that the company
they work for has purchased services or products
from free-lance workers or small businesses.
About
the Small Business Watch: The
Discover Small Business Watch is an index that
measures the relative of economic confidence of
U.S. small business owners who employ less than
five employees, a segment that consists of 23
million businesses producing more than a trillion
dollars in annual receipts. The Watch is based
on a national random survey of 1,000 small business
owners conducted by Rasmussen Reports, LLC (www.rasmussenreports.com),
an independent survey research firm. The numeric
index is calculated by assigning values to responses
to a set of six consistent questions. The base
value of the Watch was established at 100.0 based
on surveys conducted in August of 2006. In tandem
with each month's Watch, Rasmussen also surveys
4,000 consumers to gauge purchasing behavior and
attitudes towards small businesses.
About
Discover Financial Services LLC
Discover Financial Services LLC, a business
unit of Morgan Stanley (NYSE: MS), operates the
Discover Card with more than 50 million Cardmembers,
and the Discover Network with more than 4 million
merchant and cash access locations. Discover
Financial Services also operates the PULSE ATM/debit
network, which serves over 4,200 financial institutions
and includes almost 250,000 ATMs and approximately
3.4 million POS terminals. For more information,
visit
www.discovercard.com,
www.discovernetwork.com
or
www.pulse-eft.com.
Media Contact:
Laura Gingiss
Discover Financial Services
224-405-0185
lauragingiss@discoverfinancial.com
Daniel Delson
Robinson Lerer &
Montgomery
646-805-2036
dmd@rlmnet.com