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Small-business confidence droops

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Optimism at the nation’s tiniest businesses appears to have stalled in December, as more owners faced cash-flow problems and planned to cut spending, according to a survey by the Discover credit card company.

The company’s monthly poll of very small companies -- those with fewer than five employees -- showed that 62% viewed the economy as poor, up from 59% in November. About 45% have had cash flow problems that caused them to delay paying their bills by more than 90 days, up from 43% last month.

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Fifty-one percent of the business owners surveyed said they thought the economy was getting worse -- that’s up from 46% last month.

“Through the four years we’ve been studying them, small-business owners have remained a bit fickle when it comes to their confidence in the economy,” Ryan Scully, director of Discover’s business card, said in a news release. “Like the rest of us, they’re seeing some positive signs, but they aren’t ready to declare victory, especially not with 62% of them still rating the economy as poor.”

We checked in with several business owners Monday to see whether the survey’s findings rang true.

Scott Hauge, a small-business lobbyist and the owner of an insurance brokerage firm in San Francisco, said he cut his salary in half this year, a move that helped keep his company in the black. Hauge, who owns Cal Insurance & Associates, said he feels fortunate that he can take any salary at all.

Thea Selby, a principal at San Francisco-based Next Step Marketing, said the company had been expecting a better year in 2010, but sales were flat. Still, she said, some recovery among media businesses could lead to better times in 2011. The company has recently hired a part-time worker, with hopes of making the job full time next year.

Each month Discover queries 750 randomly chosen owners of very small companies about sales, cash flow, their expectations about the economy and other issues.

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-- Sharon Bernstein
Twitter: @sharonbernstein

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