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TheStreet Open House

3 Things You Should Know About Small Business: December 13

Stocks in this article: YELP

NEW YORK ( TheStreet) - What's happening in small business today?

1. Small-business owners make further cuts in capital spending. According to the latest Wells Fargo/Gallup Small Business Index, U.S. small-business owners are the "most pessimistic" they have been since the third quarter of 2010.

The survey, conducted November 12 to Nov.ember 16, used a random sample of 607 U.S. small-business owners.

It found the respondents have pulled back on capital spending plans since July. The net capital spending component over the past 12 months declined to -22 from -11 in July, the index showed.

Worse, the capital spending component (one of six used to compile the overall index) fell to -14 in November from -1 in July, the lowest level in more than two years, suggesting that small-business owners are likely to pull back on their business investments even more, given their negative expectations for the next 12 months.

The other five components, including hiring, revenue, financial situation, credit and cash flow, also declined during the same time period.

"The current negative net capital spending intentions mark a significant shift from the positive double-digit scores seen prior to 2008. Positive net spending intentions reflect how small-business owners usually expect to grow their businesses and take advantage of advancing technologies to help them do so. However, this has not been the case since the recession and financial crisis of 2008-2009, with net capital spending intentions reaching a low of -23 in November 2008," the survey found.

Small-business-owner capital spending expectations were slightly positive during the first two quarters of 2012, before turning neutral in July and then plunging in November, according to the index. The last time net capital spending intentions were lower than they are today was in July 2010, at -20, it says.

2. Online reviews increasingly leading to litigation. Businesses are growing more aggressive in how they respond to harsh reviews made on websites such as Yelp (YELP - Get Report) Marketwatch.

Last week, a judge ordered a woman in Washington, D.C. to remove negative and potentially defamatory statements she made about an unsatisfactory job done in her home by a contractor.

The review was quite scathing, even implying that said contractor might have stolen jewelry out of the home. Christopher Dietz, owner of contractors Dietz Development is suing the client alleging lost work opportunities and damage to his reputation, the article says.

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