Healthcare and tax relief are cited by nearly one in five small business owners (19%) as the issues that will most sway their votes in November, followed closely by energy policy (cited by 15%). According to the survey, the number of small businesses offering healthcare benefits to employees jumped significantly (71% vs 54% last year). High energy costs have taken a toll. Nearly half (45%) of business owners report that higher gas and energy costs have had a significant impact on their business.

Despite these concerns, business growth and customer service remain the focus of small business owners nationwide who say they are increasingly feeling the effects of the economy. While still robust, optimism around growth has waned this fall. Those expecting their businesses to grow despite the current economic climate declined to 43% from 49% a year ago, and fewer expect this year's revenues to exceed last year's (44% down from 51%). Hiring plans dipped slightly to 34% from 37%. The percentage of small business owners planning to make capital investments in the next six months is also down (56% from 63% last year), according to the survey.

“To jumpstart growth, small businesses will improve customer service, keep a careful watch on expenses, and reinvest profits or look for financing to make the investments they need,” said Susan Sobbott, president, OPEN from American Express. “Small businesses have confidence in their ability to drive their business forward and are still planning to reinvest profits to fuel growth. They remain confident in their ability to manage cash flow, are carefully planning capital investments and willing to turn to outside financing.”

According to the survey, one in three small business owners (34%) say the one thing their company needs to be successful is more money. Asked how they plan to finance their company's growth, nearly one in four (37%) plan to reinvest profits; others will take out a line of credit (13%), pursue a bank loan (10%), or seek venture capital or private investors (10%).

An increased number of small business owners are willing to take moderate financial risks to grow their business (41%) compared to (35%) last fall. Male entrepreneurs were most willing to take any type of financial risk (68%) when compared to female counterparts (49%) and small businesses overall (58%).

Impact of Higher Energy Costs
More than three out of four owners/managers (78%) say that higher gas and energy cost have had a significant or moderate impact on their business. Nearly a third (31%) say they lost sales as a result of higher costs. Others (37%) have changed how they market and sell. Seven in ten (71%) say they had to pay higher costs for materials and products. In response to higher energy costs, a greater number of business owners took some action this fall compared to a year ago (71% vs. 61%) including reducing use (38%) and raising prices (33%).

Most small business owners (86%) have taken steps to make their business more environmentally friendly. More than half of small business owners are or plan to recycle waste products (52%), follow environmental recommendations within their industry (42%), buy and use recycled products for their business (32%), and offer eco-friendly products and services to customers (23%).

Hiring Plans are Down
One out of three (34%) businesses report they have plans to hire full and/or part-time staff in the next six months. Among those, eight out of ten say they need to hire to handle their growing business, followed by those who need to hire to help increase business volume (78%). Four in ten will hire because they need seasonal help (41%), and about one in three say they will hire because they have a new business venture (37%), or have finally found the right candidate for the position (35%).

Entrepreneurial Mindset
Although entrepreneurs face challenges to growth they still love what they do and can't imagine making a living any other way (38% vs. 44% last spring). One in four describe running their business as an uphill battle (25%). One in five find their business financially rewarding (22%), and one in ten experience 24/7 stress as a result of managing their business (10%). However, two-thirds (69%) would recommend a friend or family member go into business for themselves. The top reasons for their success, according to the survey are “I'm able to create good relationships and a sense of community through my business” (31%), and “I've struck a balance between my career and my family” (28%). The most desired aspect of running a small business is that owners/managers enjoy living and working by their own rules (38%).

The personality trait found to be most important in helping small business owners succeed in their business is being knowledgeable about every detail of the business (27%). Ironically, the personality trait most negatively affecting business is that they are too hands on (28%).

One third of business owners (36%) find they are most frustrated with not having enough time which was up sharply from the spring (23%).

“Small business owners want to be accountable for the success or failure of their ideas, often living and working by their own rules: charting their own course,” said Susan Sobbott. “For that they will endure the 24/7 stress, the pressures of meeting payroll, and the lack of time to accomplish everything that needs to get done.”

Technology Transformation
According to the semi-annual Monitor, a majority of small business owners (51%) believe that “technology has transformed the way business is conducted” over the last 20 years. So it is not surprising that four in ten small businesses will purchase new technology over the next six months, including computers and PCs (33%) and computer/system software or licenses (25%).

Nearly half (47%) will invest in mid-priced equipment, such as laptops, desktops or printers. One in four (25%) will consider major infrastructure investments, such as software, services or telephone systems. Modestly priced items such as PDAs or smart phones will be considered by fewer (12%).

Survey Methodology
The OPEN from American Express Small Business Monitor, released each spring and fall, is based on a nationally representative sample of 625 small business owners/managers of companies with fewer than 100 employees. The survey was conducted via telephone by International Communications Research from September 12-September 27, 2006. The poll has a margin of error of +3.9%.

About OPEN from American Express
OPEN is the American Express team dedicated exclusively to the success of small business owners and their companies. The OPEN Team supports business owners with unparalleled service. With tailored products and services, the team delivers purchasing power, flexibility, control and rewards to help customers run their business. Specifically, business owner customers can leverage an enhanced set of products, tools, services and savings, including charge and credit cards, convenient access to working capital, robust online account management capabilities and savings on business services from an expanded lineup of partners. To obtain more information about OPEN, visit www.OPEN.com, or call 1-800-NOW-OPEN to apply for a Card or loan. Terms and conditions apply.

American Express Company (www.americanexpress.com) is a leading global payments, network and travel company founded in 1850.

Contacts:
Rosa Alfonso
212.640.1712
Rosa.M.Alfonso@aexp.com