CATEGORIES

Categorized | Breaking News

Index shows small business optimism

A new small business success index (SBSI), initiated by the University of Maryland’s Robert H. Smith School of Business and Network Solutions, a provider of Web solutions, shows optimism among small business owners.


The nationwide telephone survey of 1,000 U.S. small business owners, conducted in December 2008 and January 2009, found that 69% were profitable in 2008. The survey gathered benchmark data to develop the SBSI.


The SBSI also revealed the majority (69%) of those who showed a profit in 2008 said their success was equal to or better than the previous year, and 70% of small businesses expect their firms to still be operating in five years as opposed to being closed, sold or transferred.


Regardless of the current economic downturn, nearly half of small businesses surveyed believe the economy will improve or at least remain unchanged in 2009. The survey also showed that small businesses are still investing in their companies with 67% planning to spend the same or increase overall business spending.


According to the U.S. Census Bureau, more than 27 million small businesses operate in the United States, employing more than 40 million people.


Small businesses included in the study were privately owned (not publicly traded), for-profit, had fewer than 100 employees and had a payroll and/or contributed to at least 50% of the owner’s household income. The resulting index identifies and measures the factors that lead to success. A small business can compare its company to its peers by taking the survey and receiving a quantitative analysis in return at www.growsmartbusiness.com.


“Small business owners’ optimism during the current economic downturn has a correlation to how competitive they are in being customer oriented,” said P.K. Kannan, director of the Center for Excellence in Service at the University of Maryland’s Robert H. Smith School of Business. “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.”


Survey’s key findings
• 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 five years as opposed to being closed, sold, or transferred, and of these, 66% expect to be bigger in size ;
• Small businesses are optimistic, regardless of the current gloomy economic situation;
• 23% of small businesses believe the economy will improve in 2009;
• 26% of small businesses believe they will remain unchanged in 2009;
• 48% of small businesses expect a decline in 2009;
• 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 spend;
• 23% plan to increase spending on professional development of employees; and
• 26% plan to increase their Internet marketing budgets, including online advertising and website development.
Source: Robert H. Smith School of Business at the University of Maryland


Leave a Reply