Small-business owners are feeling more optimistic than they have in years. Business is on the upswing, and resources are available to support business growth. Business owners feel so confident, in fact, that many have given themselves a raise.
Research from the 2015 American Express OPEN Small Business Monitor survey found that 67 percent of small-business owners have a positive view of the economy and 80 percent believe capital is available to them if they need it. On a personal level, the number of business owners concerned about their own futures dropped by almost 20 percent, down to less than half.
With this increased optimism, you'd think more business owners would be eager to make investments and grow their businesses, but entrepreneurs are in customer acquisition and shoring-up mode instead. They are putting these two steps ahead of investing in equipment, hiring new workers or using social media and research.
This cautiously optimistic state of mind makes sense given the economic hard times of the last several years. It is natural to want to avoid being overextended, since many people had to cut back dramatically and lay off staff when times were tough.
But even if you are not ready to make big moves now, it is important to take the right steps to be ready when the time comes to grow.
1. Continually Take Stock
As a business tool, data analysis took a big dive among entrepreneurs this year. Data analysis fell 20 percentage points between 2014 and 2015, with only 45 percent of business owners analyzing data to run their operations. “Big data" may have lost a bit of its buzz, but it's a mistake to think of research as a fad whose time has passed.
Even if you are not in investment mode, it is important to keep your finger on the pulse of what matters to your customers. Track the products or services that customers buy most from you and the ones that are the most profitable. This is easily viewed through point-of-sale software and inventory-tracking packages. This view will keep you focused on the best opportunities now and what customers may want to buy from you in the future. To make sure you have plenty of customers to track, make it a point to keep in touch with them. Survey your customers to find out what they value most about you and where you are lacking. Ask them if they would recommend you to a friend, and if not, how you can do better.
2. Start Small Now
Only 34 percent of businesses said they had hiring plans, and only 56 percent planned to make capital investments in their companies. This cautious position is just fine, but consider taking some small steps now to prepare for when you are ready to hire or buy.
For example, if you know that the purchasing process on your site could stand improvement, start to consider the greatest priorities for a site upgrade. Your first step can be researching possible vendors or software that can help in the process. Likewise, even if hiring is a ways off, you can begin the process of identifying the skills you will need and which methods you'll use to find candidates. If you haven't hired in a while, consider some new online tools. Many business owners find that social media is a great place to post an ad and contact potential candidates.
3. Keep Up the Conversation
More than half of business owners polled in the OPEN Small Business Monitor use social media tools. The number of businesses relying on these tools held steady from last year.
Even if you are not hiring or buying new technology right now, keep your social media presence high to remind current customers of why you are the best choice, and use these tools to lure in new prospects.
Download a PDF of the Spring 2015 American Express OPEN Small Business Monitor and the Industry Spring 2015 Fact Sheet. Previous reports are available at the Small Business Monitor page.
Photo: GENESIS PARTNERS / KARIM HUTSON / MEMBER SINCE 94