As a possible sign of economic recovery reaching Main Street, more small business owners cite growing their businesses as their top priority over “keeping/maintaining my current business and sources of revenue”. According to the American Express OPEN Small Business Monitor, more than one-third (37%) are expecting to grow and are willing to take a financial risk to do so (56%). Most (65%) believe growth will be slow and steady; others are planning for aggressive growth (16%).
Integral to growth, 35% are planning to hire full and/or part-time staff, up nine percentage points from fall. Among those with hiring plans, one-third plan to hire one (35%) or two employees (33%), less than one-in-ten (8%) plan to hire three, and one-in-five (20%) plan to hire four or more over the next six months.
For marketing their businesses, more entrepreneurs are using social media to attract new customers (44%, up from 39% six months ago), specifically
And four-in-ten plan to make capital investments (44%, on par with 48% last spring and up from 38% last fall). These business owners are most eager to spend on technology (33%) including computer systems and software, and additional software licenses and new computers. Technology also an important role in online marketing, with the top three techniques being a company website (65%), search engine optimization (36%) and online social networking (35%).
How to Achieve Growth
Among those business owners approaching growth aggressively:
•One-in-five plan to introduce new products and services in order to grow (22% vs. 14% of slow and steady business owners and 2% trying to keep the lights on);
•More than half use online social networking to market to customers (58% vs. 33% of slow and steady business owners and 21% trying to keep the lights on); and
•Treat employees and customers well: More than four-in-ten offer healthcare benefits to employees (43% vs. 36% of slow and steady business owners and 26% of trying to keep the lights on).
A mantra for success? When asked which business mantra they ascribe to, the top choice among entrepreneurs was “you are only as good as your people” (27%), followed by “the customer is always right” (24%), “never stop marketing” (11%), “it’s all about who you know” (5%), and “it’s about being in the right place at the right time” (3%). Only 28% do not have a mantra.
While nearly half (49%) of business owners have a positive outlook on business prospects, despite the economic climate, 18% are “trying to keep the lights on.” And, cash flow concerns have risen to a historic high of 66% from a near pre-recession low of 53% just six months ago. The greatest concern for one-in-five business owners (23%) is the ability to pay bills on time, followed by accounts receivable and having enough cash to win new business (each 14%), as well as the ability to meet payroll and the capacity to accurately track cash flow (both 7%).
A potential contributor to the cash flow crunch is ability to access capital. Among business owners, 29% say it has gotten harder to access capital over the last six months. Other factors include higher gas and energy prices (80%).
The Monitor also looked specifically at key, bellwether states (Texas, Florida, New York, and California), as well as women entrepreneurs, small business owners by generation, and by industry. Some of the notable findings include:
•More than half of Texans plan to make capital investments; more than eight-in-ten entrepreneurs in New York are experiencing the impact of rising gas and energy prices in their business; more than four-in-ten Florida entrepreneurs use social media tools to attract new customers, and more than half of California business owners are optimistic about the economy and their business prospects.
•Nearly nine-in-ten women entrepreneurs are worried about their ability to save for retirement.
•Generation Y has the most positive outlook on the economy; Generation X are the most likely to use online marketing techniques for their business, and Baby Boomers are most likely to have cash flow issues.
•Among industries, more services businesses feel access to capital has gotten harder to obtain.
Spring 2010 Monitor, the 2009 Holiday Monitor, and the Fall 2009 Monitor. You can also view results from the Fall 2010 Monitor, Spring 2010 Monitor, the 2009 Holiday Monitor, and the Fall 2009 Monitor.