Small business optimism wavers in March

4/13/2011

Despite the fact the small business lending is showing signs of improvement, entrepreneurs are feeling less confident about the future of the economy, according to a new report from the National Federation of Independent Business.

The survey found that small business optimism dropped 2.6 points to 91.9 in March. Still, many remained upbeat in regards to employment and pricing. Hiring remained positive over the course of the month, and small businesses remain optimistic that they can improve revenue by lifting product prices.

"Optimism faded and is still at recession levels. Maybe it is a 'new normal,'" the report suggests. "Maybe we will not see the surges we experienced at the start of a recovery. Times are different, government is a larger drag all the time. It wants more taxes and imposes more restrictions."

If companies plan to increase their product prices, they need to be careful how they handle the situation. Experts agree that the best way to raise prices is to explain to consumers why it is a necessary process. This helps loyal customers rationalize the higher prices without damaging their relationship with the business.