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TD Bank small business survey: Performance and staffing levels stable despite diminished confidence in U.S. economy

Despite lowered optimism about the U.S. economy, a majority of small business owners anticipate stable revenues and balanced staffing levels in the months ahead, according to a new survey from TD Bank, America’s Most Convenient Bank.

An encouraging 66% of small businesses polled during a recent TD Bank survey said that they expect to meet or exceed revenue projections in the upcoming quarter – a slight increase from the 57% that met or exceeded revenue projections during their most recent fiscal quarter.

Although two-thirds of American small businesses said they are not optimistic about the economy, TD Bank’s survey – which polled 300 small business owners within the bank’s Maine to Florida footprint – revealed that a majority (69%) expect to keep staffing levels the same over the next quarter, with 16% planning to add at least one position.

“American small business owners are a resilient group, and TD Bank’s recent survey results are consistent with what we see each day in our communities from Maine to Florida,” said Fred Graziano, head of regional commercial banking, government banking and small business, TD Bank. “Despite the economic obstacles they continue to face, these findings indicate that small business owners and employees continue to do what they can not just to make ends meet, but to exceed their business goals.”

Aside from economic factors, TD Bank’s survey also found that small business owners are divided about what will pose the biggest challenge to their business in the next six months. Rising healthcare and insurance costs (22%), declining sales (21%), retaining and growing their client base (21%), and cash flow concerns (19%) are their top worries. Fewer believe rising energy costs (10%) and pressure from larger competitors (7%) represent the greatest challenges.

Overall, small business owners remain committed to investing in their business. Nearly 75% expect to maintain or increase capital investments over the next quarter, and when asked to best describe their future plans for their business, 64% said they will look to stay afloat or significantly grow in the next five years. Only 11% plan to sell or shutdown their business altogether.

The Florida-only results (100 polled small business owners) of the survey include:

•When asked to rate their optimism about the U.S. economy…31% are optimistic or neutral

•When asked to grade their business’ performance during the most recent quarter…54% performed as expected or significantly exceeded revenue projections

•When asked to project their business’ performance in the next quarter…60% will perform as expected or significantly exceed revenue projections

•When asked about next quarter’s staffing plans…86% expect to keep levels the same or hire up to two or more new positions

•When asked about company’s capital investments in the next quarter…73% expect capital investments to stay the same or increase as much as 15%

•When asked to indicate which of the following poses the biggest challenge…Rising energy costs (10%), declining sales (22%), retaining/growing customer base (23%), cash flow concerns (19%), larger competitors (5%), or rising healthcare and insurance costs (21%)

•When asked to best describe their business plans over the next five years…65% will grow or do what they can to stay afloat; 4% plan to shutdown

About TD Bank’s Survey: TD Bank polled 300 small business owners in its Maine to Florida footprint to understand their companies’ current and anticipated financial health, as well as their thoughts on the overall economy and their future business plans. The research was conducted in August 2011 by ORC International, and surveyed companies with 50 or fewer employees and annual sales of no more than $5 million.

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