Small-business owners are feeling good, better in fact than they’ve felt in more than two years. But that doesn’t mean this group—who own the majority of the nation’s businesses—doesn’t have serious concerns around the margins, believe the U.S. economy will return to world dominance, or plan to go on hiring binges.

Businesses with between five and 499 employees being tracked by the American City Business Journals, the parent company of Portfolio.com, are more optimistic than they have been since the spring and early summer of 2007. Yet shadows fall on that upbeat attitude.

“The highest highlight is optimism is up again. It really is a 12-month high. We really haven’t seen this,” said Godfrey Phillips, ACBJ vice president for research. “But with that optimism is a worry that keeps pervading.”

The survey shows 75 percent of decisionmakers believed at the end of 2009 that their business prospects will be “a lot” or “a little” better in the next 12 months, the best that level has been since the spring and early summer of 2007. And now 40 percent believe the economy has turned around, a big jump over the just 28 percent who believed in a turnaround in August.

So where are the dark clouds?

• The percentage of business owners concerned about the safety of their businesses shot up to 36 percent in December, compared to 22 percent in September. That’s a big jump that could well have something to do with worries about the increased cost of doing business and about the state of the economy.
• The percentage of business owners concerned about the long-term survival of their firms also grew to 42 percent from September’s 37 percent, a small move but still an ominous one for those who expect small business to lead the United States out of economic doldrums, as it has in past postwar recessions.
• Sixty-five percent remain concerned about the overall U.S. economy. That figure actually grew from 59 percent in September, though it has remained steady at above 50 percent since the beginning of 2008, during the dawn of the Great Recession.
• Slightly more businesses are concerned about the cost of doing business, at 57 percent, than had the same worries in September, when the number was 54 percent.

But while all those negatives go into the pile, there’s another small-business concern that could actually be positive news for the economy. Many more business owners in December—47 percent versus 27 percent in September—said they were concerned about finding and keeping good employees.

That kind of movement is generally an indicator of good times ahead for the economy as a whole, because it means a robust job market is making it harder to find the right employees for small businesses. But despite fears about keeping good employees in the mix, the total employment picture remains a problem. Employers shed 85,000 jobs last month, and the unemployment rate remained at 10 percent, still near a postwar high.

That doesn’t mean there’s no movement in the job market, though.

"I wouldn't say that we're seeing a tremendous increase, but we are seeing an increase," Joanie Ruge, senior vice president at the nation's largest temporary firm, Adecco, told Portfolio.com the day before the latest job numbers were released. "Many of those assignments can be a month or a year or turn into a (permanent) job."

Traditionally, though, small businesses account for 65 percent of U.S. hiring. And they aren’t even quite buying into the temporary hiring yet—which may help explain why many who expected a stronger jobs report were disappointed on Friday. Ruge said even in the temporary field, her firm was seeing more action from large and mid-size firms.

"The smaller companies…they have to watch their purse strings a little bit tighter," she said.

Phillips said a fundamental change in hiring is going on. He recounted a focus group in Dallas he conducted, in which a business owner said, “'We used to hire three people for one job, now we hire one person for three jobs.’ They expect people to be more productive and be able to do more than one thing.”

And there’s something else significant going on with small businesses, Phillips said. A smaller percentage of them believe the nation will ever regain its former economic dominance. In December, 54 percent of small-business owners believed the United States will regain its former strength, compared with 64 percent last January.

That may just be the weariness at the end of a long recession talking. Or it may be an insight that the U.S. and global economies have changed, and American businesses will have to tap into new markets beyond a dynamic domestic one if they expect to thrive.

“I think people realize that there’s going to be a little bit of a shift in the power base,” Phillips said. “This great recession, it really has left a scar.”

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Kent Bernhard Jr. is News Editor of Portfolio.com