A prolonged economic slump is taking a heavy toll on small businesses, with owners reporting sharp declines in profits and a bleaker outlook, The Wall Street Journal reported.

In an Office Depot survey of 1,000 small business owners conducted in July, 66 percent said the weak economy has impacted their business, and 40 percent said profits were down from last year.

Among owners reporting losses, 21 percent said profits were down by more than a quarter, the survey found.

Only 42 percent said they expect the economy to improve in the next six months, down from 58 percent in October. A full 79 percent said they have no plans to hire new workers before the end of the year.

More than half of respondents said the situation is prompting them to tweak their business plans, including changes to marketing strategies, clientele and products and services.