BizSugar.com › Strategy › Time for small businesses to hunker down

Millions of U.S. small businesses — especially in the retail, business-services and housing industries — could be vulnerable if a recession strikes on top of the housing slump and credit crunch.

Small businesses are closely watching their financials, their customers' buying habits and other signs of where their companies and the U.S. economy may be heading. Lacking the financial reserves of bigger companies to weather a long-lasting slump, many little ones could be hurt by emptier shops, weaker sales and cautious consumers unwilling to spend on pricier items and services.

"Small businesses are definitely feeling the pinch," says James Barrood, executive director of Fairleigh Dickenson University's Rothman Institute of Entrepreneurial Studies. "They're cutting back, hunkering down and trying to be more efficient with their operations and their marketing efforts."