SCOTT BLAKE

Florida Today

The new generation of small-business owners might call J.D. Bauer "old school."

But he's also a survivor.

Bauer was a maintenance supervisor for a local company who saved his money and bought Smitty's Welding Shop at 2526 S. Harbor City Blvd. in Melbourne about 30 years ago. Today, he's still in business and, he says, doing well.

"I would have never dreamt when I bought the place that there would be so broad a spectrum of people who need welding," Bauer said. "It's kept bread on the table all these years, and we haven't missed a meal yet."

Despite his longevity as a small business owner, Bauer also faces the future with some trepidation over the rising costs of doing business and the slumping economy. He's not alone.

A survey of small business owners nationwide confirms the outlook that small business is risky business these days.

Seventy-one percent of small businesses say the economy is worse today than five years ago, compared only 43 percent a year ago, a 2008 survey by the National Small Business Association found. It also found that sales and profits are down, and fewer jobs are being created by small businesses this year than at other time during the survey's 15-year history.

In addition, half of those surveyed this year said "economic uncertainty" is among the biggest challenges they face in the survival and growth of their businesses.

On a more encouraging note, 70 percent of business owners say they are confident in the future of their business, according to the survey, which polled 500 small business owners nationwide.

Robert Souza, owner of Wahoo Coffee Company at the Publix Cornerstone Plaza on State Road A1A in Cocoa Beach, said he is optimistic that he will be able to stay in business, but costs for everything from plaza maintenance fees to milk and coffee beans have increased significantly. Souza said business was up substantially over last year until April.

"Things started flattening in April," he said. "Something caused it to go flat, but I don't know what."

Souza said he wants to work with the Cornerstone Plaza's management to see if some of his lease costs can be reduced.

He still has about two years left on his lease, but if he and management cannot work something out, he plans to look elsewhere when his lease expires.

He sees a lot of empty commercial space locally, so he is hopeful that his landlord or others will offer a more affordable arrangement.

"The cost of everything has gone up," he added. Big business "is trying to push the cost of everything down to the little guy."

Bauer's welding shop has lost some business from the downturn in the housing market. The shop makes steel columns used in housing construction.

"That has fallen off to almost nothing," he said.

Fortunately, he said, Smitty's has a wide range of customers -- from local municipalities to people who come in off the street for a quick repair job -- so the drop in housing construction has not hurt his business too much.

But he said increased costs for materials and fuel remain a concern, and high cost of providing health insurance for his staff of several people has prevented him for offering them health insurance as a benefit.

The NSBA survey found that just 25 percent of companies with four or fewer employees are able to offer a health benefit, and businesses of all sizes are feeling the impact of the tightening of lending standards that has come with the economic slump.

"America's small businesses are waving the yellow flag," the association wrote in a report on the survey results. "They are extremely anxious about the economy and fear a recession on the horizon. The past year has not been a good one for the small business economy, and projections for the next 12 months are even less optimistic."

According to the U.S. Small Business Administration, Florida had more than 1.9 million small businesses in 2006. The SBA defines a small business as one with fewer than 500 employees, but most small businesses are much smaller.

Even before the economic downturn, many small businesses didn't survive long. As of the latest survey available in 2005, 66 percent of new small businesses survived beyond two years, and only 44 percent survived beyond four years, said SBA spokesman John McDowell.

"In general, small businesses are pretty dynamic, meaning they have lots of turnover" with failures and startups, McDowell said.

Mike Sirounis, co-owner of Harbor City Business Brokers, a Melbourne firm that matches buyers and sellers of small businesses, said the number of sales his firm handles is down by up to 25 percent this year from last year, mainly due to the economy.

A big reason for that is the tightening of lending standards, Sirounis said.

"It's getting harder to qualify buyers" for loans, he said.

FLORIDA TODAY staff writer Wayne T. Price contributed to this story.

Contact Blake at 242-3644 or sblake@floridatoday.com.

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2008 National Small Business Association Survey results

--- 71 percent of small business owners say the economy is worse today than five years ago, up from 43 percent a year ago.

--- 70 percent remain confident in the future of their businesses.

--- 25 percent are able to afford to offer health care insurance for their employees.

--- 35 percent of companies with four or fewer employees cannot get the financing they need.

--- 54 percent of small business owners have some type of business loan, using credit cards, personal savings, and their homes to leverage the loans.

--- 77 percent say rising energy prices have had a negative effect on their business. Source: National Small Business Association annual survey of 500 small businesses nationwide.