What do small business owners really think about the state of the economy? According to the Spring 2012 American Express OPEN Small Business Monitor, 56 percent have a positive outlook on business prospects over the next six months, up from 48 percent last fall. The semi-annual survey, now in its 11th year, also reports optimism on the employment front: 35 percent plan to hire full- or part-time employees (up from 31 percent in the fall), and far fewer said they will freeze hiring or cut back (44 percent, down from 61 percent in the fall).
This enthusiasm, however, is tempered by caution when it comes to expectations for growth. When asked about priorities over the next six months, 31 percent of business owners reported that maintaining their current business and sources of revenue, followed closely by growing their business (29 percent, down from 37 percent last spring) were top of mind.
“The research clearly shows that we cannot look at any one economic indicator in a vacuum to predict small business investment behavior,” said Susan Sobbott, president of American Express OPEN. “While small business owners are more optimistic about the economic recovery, they are not turning a blind eye to the uncertainty that lingers. They are waiting for more proof that the recovery is real and sustainable before investing heavily in growth initiatives.”
Getting more customers
While growth currently isn't a top priority, when asked what would most help them grow their businesses, nearly half (46 percent) say increased customer demand. To set their businesses apart from the competition, 80 percent of entrepreneurs will place a heightened focus on better servicing their customers.
Even as business owners are squeezing more out of employees, they are holding firm to the tenet that happy employees make for happy customers. Nearly every business owner surveyed (96 percent) says providing good customer service has helped them survive a tough economy.
In an effort to provide the best customer service possible, more than half (57 percent) train their employees themselves; one-quarter (26 percent) have a senior member of staff train them, and one-tenth (10 percent) pay for formal training. To further keep employees incentivized, more bosses are offering benefits, such as healthcare (59 vs. 49 percent last fall).
Navigating a tough economy has caused entrepreneurs to look toward low-cost marketing methods such as social media. In fact, more than half of business owners surveyed use social media tools to attract new customers (55 percent, up from 50 percent last fall). Platforms they are using include:
- Facebook (38%)
- Google+ (14%)
- LinkedIn (13%)
- Twitter (11%)
- YouTube (10%)
- Blogs (6%)
- MySpace (4%)
- Foursquare (2%)
- Pinterest (2%)
While social media use is on the rise and correlations to growth are becoming more apparent, just 27 percent say a social media presence is necessary for their company, a similar number (28 percent) say it is “nice to have” and more than one-third (39 percent) find it unnecessary. Looking ahead, 41 percent of business owners plan to increase their company’s social media presence in the next year.
Other growth generators cited by the business owners surveyed include tax cuts (20 percent), access to capital (13 percent) and the ability to hire more staff (7 percent). Tax relief is the most pressing issue the president and congress need to address (33 percent).
For more findings from the survey, download the Spring 2012 Small Business Monitor report summary.
Photo credit: Regency Air LLC, David Lomakin, Santa Ana, CA, Member Since: 1997