BANGALORE, INDIA: New year is around, each one of us are brimming with hopes. Its right time to leave the past behind and start with new aspirations. With recession eating up first half of 2009 and recovery the next, most of the businesses are awaiting for a fulling 2010.  So lets have a look at what SMBs predict.

The forecast of owners and managers of small- and medium-sized enterprises for the next year is optimistic, according a Citibank's survey, conducted in cooperation with the Ipsos Tambor research agency.

Thirty per cent expect an overall improvement of the economy, while 40 per cent expect an improvement for their own companies. One-third of the SMEs would be able to restore their pre-crisis production capacity within one month, in the event of an economic recovery.

Another study by Administaff, a provider in human resource services pointed that More than 52 percent of small business owners expect an economic turnaround in 2010, while 13 percent indicate that a rebound is happening now, and 21 percent think the recovery will be in 2011 or later.

“Small and medium-sized businesses are signaling that they are cautiously optimistic about an economic rebound in 2010,” said Paul J. Sarvadi, Administaff's chairman and chief executive officer.

The economy was listed by 76 per cent of business owners as one of their biggest short-term concerns, down from 83 per cent in July, followed by 50 per cent citing government health care reform, 41 percent listing controlling operating costs and 39 per cent specifying rising health care costs. However, for the longer-term, those who said they were “very concerned” once again listed the economy in fourth place at 41 per cent, whereas 47 per cent named government expansion and the effect on business as the leading issue, 45 per cent cited potential tax increases as second and nearly 42 per cent designated the federal deficit and the total national debt as third.

When respondents were asked about their pipeline for new business for early 2010, 48 per cent responded that they expect a sales increase, up from 41 per cent last quarter; 33 per cent predict it will stay the same, while only 11 per cent anticipate decreasing sales, down from 15 per cent in July; and 7 per cent were unsure.

In addition, 58 per cent of owners and managers of small and medium-sized businesses said that they are either meeting or exceeding their 2009 performance plans, with the remaining 42 per cent reporting that they are doing worse than expected.

2009, A cash crunched year

The impact of the crisis on small and medium sized enterprises (SMEs) is more serious than their managers had expected at the beginning of the year, said the Citibank report.

Almost two-thirds of the small- and medium-sized enterprises participating in Citibank's survey reported that their financial situation deteriorated this year, which was marked by the financial crisis. A deterioration of the economic situation was expected by 43 per  cent of businesses last January, yet 60 per cent of companies felt its negative impact at the end of the third quarter.

However, SMEs believe that the next year would be better. Forty percent of them expect that the situation of their companies would improve.

"The survey results displayed a positive trend, namely that most companies approached their situation proactively, that they adapted and learned to work under the existing economic conditions. The most common crisis management measures were better cost control and stepping up of sales and marketing activities," said Marek Potoma, commercial banking head, Citibank.

He further added that SMEs are prepared to revive their capacity and growth.