Dec. 28, 2009

Discover® Small Business Watchsm:Small Business Economic Confidence Steady In Decemberfewer See Economic Conditions In The Country Getting Worse

Financial Planning: 62% of Small Business OwnersHave Post-Retirement Strategies74% Saw Retirement Savings Decrease during Recession
RIVERWOODS, Ill., Dec 28, 2009 (BUSINESS WIRE) -- Economic confidence among America's small business owners was steady in December as fewer of them think the U.S. economy is getting worse compared to November, and more see conditions for their own businesses getting better in the next six months, according to the Discover(R) Small Business WatchSM.The Watch index improved slightly in December to 77.0 from 76.5 in November.

"Small business owners are entering 2010 on a cautious note," said Ryan Scully, director of Discover's business credit card. "They're still looking for more encouraging signs in the overall economy, but on a positive note, the number of them who see conditions for their own businesses getting better in the next six months increased for the first time since August."

December Indicators:

  • The number of small business owners who think the economy is getting worse was down to 49 percent from 53 percent in November; while 24 percent of small business owners see the economy staying the same, up from 16 percent in November; 25 percent see the economy getting better, down from 28 percent in November; and 2 percent are not sure.
  • 22 percent see conditions for their own businesses getting better in the next six months, an improvement from 19 percent in November; but still in contrast to the 52 percent who see conditions getting worse, 24 percent who see things staying the same, and 3 percent who aren't sure.
  • 35 percent rate the current economy as fair, up from 30 percent in November; while 61 percent rate it as poor, and 4 percent rate it as good or excellent.
  • 18 percent of owners say they will increase spending on business development activities such as advertising, inventories and capital expenditures in the next six months, 26 percent will make no changes, 51 percent plan to decrease spending, and 5 percent are not sure.
  • 51 percent of owners have experienced cash flow issues in the past 90 days, down 1 percentage point from last month; 45 percent of owners have not experienced cash flow issues, and 4 percent aren't sure.

Financial Planning Poll: 62% of Small Business Owners Have a Retirement Plan

When asked about planning for the future, 62 percent of small business owners say they have a financial plan for their retirement, while 33 percent do not, and 5 percent are not sure.

Sixty-three percent say it is "somewhat or very likely" that they will have enough saved to last through their retirement, 25 percent say it is "not very likely," 7 percent say it is "not at all likely," and 4 percent are not sure.

Nearly three in four small business owners, 74 percent, say the recession has reduced their retirement savings, 19 percent say the recession had no impact, and 6 percent saw their retirement savings increase.

Of those owners who say their retirement savings have gone down:

  • 12 percent saw a decrease of up to 10 percent
  • 24 percent saw a decrease of 10 to 20 percent
  • 17 percent saw a decrease of 20 to 30 percent
  • 24 percent saw a decrease of 30 to 50 percent
  • 19 percent saw a decrease of more than 50 percent
  • 5 percent were not sure

Most Small Business Owners Make Their Own Investment Decisions

Fifty-six percent of small business owners say that they make their own investment decisions, 35 percent use a financial planner or other investment professional, and 9 percent are not sure. When asked if they have financial planning assistance through a spouse's employer, 84 percent of owners say they do not, 13 percent say they do, and 4 percent are not sure.

Fifty-two percent of owners have an IRA account, and 29 percent of them have a Keogh, Solo 401(k) or a Simplified Employee Pension plan.

Few Planning Early Retirement

Small business owners seem to be in no hurry to stop working; and depending on how you phrase the question, roughly a third of them don't ever plan to step down.

When asked at what age they plan to retire, only 13 percent said before age 60, 28 percent said between ages 60 and 65, 18 percent said between ages 65 and 70, and 9 percent will retire past 70. Not surprising - based on previous surveys - is that 30 percent said they do not plan to retire.

When asked what they eventually planned to do with their businesses, 23 percent will close them, 19 percent will transfer ownership to a family member, 13 percent want to sell, 6 percent will hire someone else to run it, and 3 percent aren't sure. And similar to the age question, 36 percent responded that they do not plan to retire, down from 42 percent in August 2006.

The views and opinions expressed by small business owners and consumers who participate in the Small Business Watch survey are their own and do not necessarily reflect those of Discover Financial Services or its affiliates.

About the Small Business Watch

The Discover Small Business Watch is a monthly index measuring the relative economic confidence of U.S. small business owners who have less than five employees, a segment that consists of 22 million businesses producing more than a trillion dollars in annual receipts. The Watch is based on a national random survey of 750 small business owners. It is commissioned by Discover Business card, which strives to offer the best business credit card for American small businesses, and is conducted by Rasmussen Reports, LLC (, 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 2006. In addition to generating the index, the Small Business Watch surveys small business owners every month on key issues, and polls 3,000 consumers four times per year to gauge purchasing behavior and attitudes towards small businesses. For past results and survey data, visit For information on Discover Business card, visit

About Discover

Discover Financial Services (NYSE: DFS) is a leading credit card issuer and electronic payment services company with one of the most recognized brands in U.S. financial services. Since its inception in 1986, the company has become one of the largest card issuers in the United States. The company operates the Discover card, America's cash rewards pioneer, and offers student and personal loans, as well as savings products such as certificates of deposit and money market accounts. Its payments businesses consist of Discover Network, with millions of merchant and cash access locations; PULSE, one of the nation's leading ATM/debit networks; and Diners Club International, a global payments network with acceptance in 185 countries and territories. For more information, visit

SOURCE: Discover Financial Services

Discover Financial Services
Jon Drummond, 224-405-1888
Robinson Lerer & Montgomery
Amanda Bonzo, 646-805-2060

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