According to the survey, new hiring is driven largely by growth opportunities that more small businesses said they anticipate. Despite an improved outlook, more small businesses also reported having cash flow concerns compared to a year ago.

Nearly half (46%) of small businesses report plans to hire more staff over the next six months, up from 35% reported a year ago. Among those planning to hire, a third (33%) said they are currently recruiting for an open position. The survey also found that businesses were more likely planning to hire part-time employees (19%) than full-timers (11%) or both full and part-time staff (15%). The top reason given by companies planning to add staff was to handle growing business (81%). Additionally, about four out of ten said they needed to hire seasonal help for the summer.

Small business hiring plans vary widely by region and by a company's age. Businesses in the North Central states are more likely to be hiring (55%) than those in the West (45%), the South (43%), and the North East (42%). Companies in business for three or fewer years are more likely to have hiring plans than older companies (55% vs. 44%), although hiring plans by older companies have increased sharply from last year, from 27% in spring 2003 to 44% this year.

Small businesses reporting hiring plans also appear to offer richer benefits packages compared to companies that do not plan to add staff, including flexible work hours (78% vs. 60%), paid vacation (62% vs. 52%), and commuting subsidies (19% vs. 12%). In all, 55% of businesses that are hiring offer healthcare benefits – nearly steady compared to those not planning to hire (53%).

Small Business Optimism Jumps
According to the survey, nearly three-quarters (72%) of small businesses reported seeing growth opportunities for their companies over the next six months, up significantly from 56% in the spring of 2003, and some had an even more bullish outlook. Among this group, almost half said they see definite signs of improvement in the economy with expanding opportunities for their businesses (47% v. 37% in 2003). In fact, 41% of businesses overall reported plans to ramp up for growth by either increasing investments in the company, introducing new products or services, or branching out into new markets.

In addition, half (51%) of businesses surveyed said they expect their revenues to exceed last year's; 36% expected revenues to remain steady. Only 11% expected revenues to fall short of last year's.

“Last fall, we began to see a mindset shift among business owners from survival to growth. The sharp jump in optimism and hiring plans this spring points to an even sharper focus on growth, said Kerry Hatch, president and general manager, OPEN: The Small Business Network from American Express. “Despite the increasing signs of optimism, however, small business concerns about cash flow are also on the rise, especially around the ability of their customers to pay.”

As many business owners appear to be ramping up for growth, managing cash flow is becoming an increasing priority. According to the survey, 62% reported cash flow concerns, up from 57% a year ago. This year business owners were most concerned about accounts receivable, 21%, up sharply from 12% a year ago. They were also concerned by their ability to pay bills on time (16%), having enough cash on-hand to win new business (14%), their ability to track cash flow (7%), and their ability to meet payroll (4%).

Business owners said they will use a variety of tactics to address cash flow crunches, including putting off purchases (31%; up sharply from 17% last spring), obtaining and using a line of credit (20%), using a charge or credit card (14%), taking out a short-term loan (9%), or leasing rather than purchasing business equipment (6%). The survey also found that business owners planned to keep capital investment plans in check. Though more than half (59%) said they plan to make capital investments in the next six months, that number was steady compared to spring 2003 (58%). Among these businesses, computers and peripherals remained at top of their list of capital expenditures (32%), followed by manufacturing equipment (21%), office equipment (19%), real estate (15%) and office furnishings (13%).

According to the survey, credit and charge cards appear to be an increasingly important cash flow management tool for small businesses, with more than three-quarters (83%) using charge or credit cards to pay for business expenses, up from 74% last spring. The most common purchase using business credit or charge cards is travel (63%), followed by office supplies (53%), entertainment (51%), computer equipment (44%), wholesale purchases, including manufacturing supplies, food products, inventory, equipment and good for re-sale (43%), and business or professional services (26%).

Networking Online and Off
The number of companies that reported using the Internet for business activities jumped to 83%, up from 66% in March 2002 when the OPEN Network Semi-Annual Monitor was launched. Similar to last year, making travel plans (60%) tops the list, followed by purchasing office supplies and equipment (52%), conducting marketing or industry research (46%), marketing/advertising (42%), servicing customers (41%), purchasing goods from wholesalers (36%), selling products or services and networking with other small business owners (each, 30%). Nearly three-quarters (73%) reported using the Internet for e-commerce, up markedly from 22% last spring, and 23% in 2002.

In addition, networking is a critical business tool for business owners. The majority, 88% indicate they network in some way with other business owners. While the Internet is an important outlet – 19% said they participated in online forums – most said they network socially (73%), join and participate in professional/trade association meetings (55%), and attend trade shows (52%).

Business owners are not only seeking to enhance their networks but also their business skills. Three quarters (74%) of business owners reported the need for skill development in disciplines including marketing and sales (52%), customer service (50%), financial management/planning (43%), negotiation (33%), decision-making (32%) and human resources (22%).

Survey Methodology
The OPEN Small Business Network Semi-Annual Monitor, released each April and October, is based on a nationally representative sample of 732 small business owners/managers of companies with fewer than 100 employees. The survey was conducted via telephone by International Communications Research (ICR) from March 8- March 19, 2004. The poll has a margin of error of +3.62%.

About OPEN: The Small Business Network from American Express
OPEN: The Small Business Network is a division of American Express that offers small business owners a wide range of tools, services and savings designed to meet their evolving needs, including charge and credit cards, convenient access to working capital and credit information, enhanced online account management capabilities and savings on business services from an enhanced lineup of partners. To obtain more information about the OPEN Network, visit OPEN.americanexpress.com or call 1-800-NOW-OPEN to apply for a card or loan.

American Express Company is a diversified worldwide travel, financial and network services company founded in 1850. It is a world leader in charge and credit cards, Travelers Cheques, travel, financial planning, business services, insurance and international banking.