How small businesses cope
When it comes to coping with the recession, executives of small businesses - in New England, at least - often take the same steps families use.
In a recent survey by Touche Ross & Co. for the Smaller Business Association of New England, 680 executives were asked what techniques they used to combat the financial burdens of recession and high interest rates.
The two most poupular methods were to stretch accounts payable (similar to a family putting off payment of some bills and making minimum payments on others); and reductions in capital expenditure programs (families simply spend less). Stretching accounts payable was mentioned by 30.8 percent of the executives; spending reductions by 26 percent. The executives also mentioned borrowing, tax planning, and sale and lease-back arrangements.
Based on their responses to some of the other questions, the executives seem pretty evenly divided about economic prospects for the next couple of years. About half of them plan to curtail expenditures; half expect real earnings (after inflation) to decline; and half expect to add employees in the next two years.
So far, however, 81 percent of the small business executives say President Reagan's economic programs have not started to work for their companies.