It’s the Small Business Success Index, launched just last week by Network Solutions and the University of Maryland's Robert H. Smith School of Business. The SBSI identifies exactly how and why small businesses are successful on 28 business activities that are critical to their long-term health.
The small businesses included in the study were privately-held companies that had fewer than 100 employees and had a payroll and/or contributed at least 50% of the owner’s household income. Rockbridge Associates Inc., a market research firm, conducted the survey by interviewing 1,000 small business owners by phone in December 2008 and January 2009.
Here are the key findings from the Small Business Success Index:
1. Small businesses are succeeding despite the economic downturn.
* 69% of small businesses made a profit in 2008.
* 7% of small businesses report that they broke even.
* The majority (69%) of those who showed a profit in 2008 indicated it was equal to or better than 2007.
* 70% of small businesses expect their firms to still be operating in 5 years as opposed to being closed, sold or transferred, and of these, 66% expect to be bigger in size.
2. The majority of small business owners remain somewhat optimistic.
* 23% of small businesses believe the economy will improve in 2009.
* 26% of small businesses believe it will remain unchanged in 2009.
* 48% of small businesses expect a decline in 2009.
3. Small businesses are still investing in their companies, in spite of the 48% of small business owners expecting the economy to be in decline in 2009.
* 25% plan to increase their overall business spending.
* 42% plan to spend the same.
* 31% plan to decrease their spending.
* 23% plan to increase spending on professional development of employees.
* 26% plan to increase their Internet marketing budgets, including online advertising andÂ
Website development.
So just where is all this optimism coming from? P.K. Kannan, director of the Center for Excellence in Service at the University of Maryland's Robert H. Smith School of Business connects small business owners' outlook to their customer relations: "Those that are more engaged in understanding their customer needs, creating relationships with customers and increasing the value of their customer base through marketing activities and innovations are also those that are the most optimistic."
Here's an idea: survey yourself! You can diagnose your own competitive success by taking the Small Business Survey.
Jerry Kalish is founder and President of National Benefit Services, Inc., a Chicago-based employee benefit consulting and administrative firm that serves private-held companies, publicly traded companies, and public sector employers. He blogs at The Retirement Plan Blog and can be reached at jerry@nationalbenefit.com.
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