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Recession Costs Small Businesses $2 Trillion

Small businesses report an estimated $2 trillion in lost profits and asset valuation since the recession started in December 2007, according to a new study. That works out to an average loss of $253,000 for each of the eight million U.S. businesses with sales between $100,000 and $10 million.

Larger companies have been less affected and are recovering more quickly, according to the survey, which was conducted last month and released today.

After showing guarded optimism in the first half of the year, pessimism has returned for an increasing number of small business owners . Only 35 percent indicated their financial condition was improving, down from 46 percent in the second quarter.

When asked to estimate the chances their company will survive the next year, 14 percent are less than 50 percent confident they will still be in business by August 2011.

“One in seven small business owners is estimating their chance of survival by the flip of a coin,” said Bernie Kuechler, the Barlow Research Analyst who authored the study.

The survey reveals that few small businesses believe the recession has ended. More than half (56 percent) of small business owners expect the recession to last beyond 2011. Fewer than one in ten believes the recession is over.

“We should not expect significant job creation in the near term from this segment,” according to Kuechler.

However, the study forecasts job creation from companies with sales greater than $10 million, where optimism and growth in sales is improving.