Small Business

More than 85 percent of small-business owners are worried about a double-dip recession, according to the latest quarterly survey by banking giant Citigroup Inc. But three-quarters of those polled said they are very or somewhat prepared for another downturn.

Mirroring results of previous surveys, 76 percent rated current business conditions as fair or poor, although the portion calling conditions fair increased to 42 percent from 38 percent in the previous quarter and those labeling conditions poor declined to 34 percent from 40 percent in April.

Respondents generally were more optimistic in the latest survey compared with three months ago. Recently, 28 percent said their business was better off today than a year ago, up from 24 percent last quarter. While 42 percent expect their business to improve in 12 months, down 1 percentage point from April, only 13 percent said conditions will worsen, down from 17 percent. The portion expecting conditions to remain about the same grew to 45 percent from 40 percent.

Mentioned most often as a primary challenge to running their business was higher taxes by 48 percent of respondents. Declining demand for products and services was next at 43 percent, followed by tighter business regulations and the cost of health insurance, each by 40 percent.

Regarding hiring plans, 7 percent of surveyed small-business owners expect to reduce their work force, down from 8 percent in April, while the portion planning to hire was flat at 17 percent. Nine in 10 said they would need to see sales increase for at least two quarters in a row before they would hire new employees.

Other recent surveys have offered similar reassuring news on small-business hiring. In a poll released Monday by Discover Financial Services (DFS), 20 percent of small-business owners questioned said they were laying off workers--the smallest percentage planning layoffs in the four-year history of that survey. And a National Federation of Independent Business survey in July found small-business hiring plans at their highest since fall 2008.

According to the latest Citigroup survey, 64 percent of respondents said they have forever changed the way they run their business, with 42 percent reducing debt, 40 percent increasing cash reserves, 34 percent freezing hiring and 32 percent delaying plans for expansion.