Half of American small business owners encountered short term cash flow problems in February 2011, according to new research commissioned by Discover Card. Most participants in the latest Discover Small Business Watch Index reported seeing overall improvement in the economy. However, rising gas prices and year-end bills on business credit cards have forced many small business owners to conserve cash this winter.
In a statement to reporters, Discover Card spokesperson Ryan Scully noted the cash flow concerns resulted in the biggest one-month spike for that metric since November 2009. The head of Discover's business credit card unit also said that "the number of small business owners seeing economic conditions getting better for their businesses is the highest we've seen since February 2008."
Survey respondents reported plans to spend the same or less on business development, with only 28 percent of company owners planning to increase budgets for advertising or capital expenditures. Every month, Discover Card compiles its Small Business Watch Index by polling 750 small business owners on their perception of their companies' performance and on the nation's overall economic health.