Key findings from this survey of nearly 7,000 small business respondents are:
- Small businesses anticipate growth in 2010
- Small businesses are doing more with less
- Small businesses look for new efficiencies as costs increase
- Small businesses question government support
“Small businesses across the country were among the most heavily impacted by the economic downturn. However, the results of our survey suggest that we are starting to see a leveling-off effect that has these determined small business owners feeling more optimistic,” said Gail Goodman, CEO and chairman, Constant Contact. “The improving sentiment among small businesses is particularly encouraging, as these passionate and innovative small businesses are the organizations that have led the U.S. economy out of past recessions. I encourage everyone to do their part and help support small businesses in their neighborhood.”
Small Businesses Anticipate Growth in 2010
Survey respondents’ generally optimistic outlook for growth is highlighted by the fact that 70 percent of surveyed businesses expect their business to grow in 2010. Of those respondents anticipating growth, 39 percent expect to hire additional employees.
In 2010 do you expect your business to?
Grow significantly - 18%
Grow moderately - 52%
Stay the same - 20%
Contract moderately - 7%
Contract significantly - 2%
Shut down - 1%
If growing significantly or moderately, do you plan on hiring additional employees this year?
Yes - 39%
No - 61%
Small Businesses Are Doing More With Less
According to the survey, 66 percent of surveyed businesses experienced increased costs of doing business over the last 12 months (up from 59 percent in 2009). The main areas affected by increased costs include: materials and supplies (64 percent); marketing (57 percent); and taxes (45 percent).
In response, small businesses are cutting back, but are focusing predominantly on reducing operating costs (57 percent) and travel and entertainment (43 percent), rather than headcount reductions. Unfortunately, respondents noted that economic pressures have forced them to further reduce their marketing budget (43 percent, up from 29 percent in 2009) and prices (31 percent, up from 26 percent in 2009).
How, if at all, has your cost of doing business changed in the last 12 months?
Increased somewhat - 50%
Stayed the same - 26%
Increased significantly - 15%
Decreased somewhat - 7%
Decreased significantly - 2%
In which areas of your business have you seen a significant or moderate increase in costs during the last 12 months?
Materials/supplies - 64%
Marketing - 57%
Taxes - 45%
Product inventory - 37%
Employee benefits - 32%
Rent/lease - 28%
Salaries - 27%
Travel & entertainment - 22%
Have economic pressures forced you to take any of the following actions?
Reduce operating costs - 57%
Reduce marketing budget - 43%
Reduce travel & entertainment spending - 43%
Change product/service offerings - 35%
Reduce prices - 31%
Layoff employees - 22%
Reduce employee benefits - 17%
None of the above - 17%
As Costs Increase Small Businesses Look for New Efficiencies
Small business survey respondents indicated that marketing is one of the areas where they need the most help — on par with sales and growth planning (both 23 percent). They are also focusing on less expensive methods of marketing through the online marketing tools available to them (e.g. email marketing and social media tools such as Facebook, Twitter, etc.).
Despite the growing popularity of online marketing technologies, email marketing is still more popular than online advertising. Eighty-nine percent of surveyed businesses indicated that email marketing was very or somewhat important to them in finding new customers and 88 percent responded that email marketing is an important tool for marketing their business.
Fifty-nine percent of survey respondents also identified that effectively reaching their audience was the most difficult aspect of running a business, which may account for the rapid adoption of social media tools. Generally, small businesses also believe that social media sites, including Facebook (51 percent), blogs (29 percent), and LinkedIn (27 percent), are important to market their business.
Please indicate which of the following tools you consider important for marketing your small business or organization?
Facebook - 51%
Blogs - 29%
LinkedIn - 27%
Twitter - 26%
YouTube - 16%
Meetup - 5%
MySpace - 4%
Small Businesses Remain Focused on Their Own Efforts to Boost Business and the Economy
Government initiatives to foster small business recovery are leading news stories, but small business sentiment is divided around how they rate the federal government's support for small business. Forty-nine percent of respondents indicated they felt the government was moderately to highly unsupportive, while 27 percent were neutral.
In a sign of the times, only 12 percent of small businesses surveyed reported that they had secured additional funding in the past year, while 16 percent said they were unsuccessful in their attempt to secure financing for their business.
Despite the raging debate regarding health care reform legislation and its landmark passage, 35 percent of surveyed businesses do not understand or have enough information to know how it will impact their business. Twenty-three percent believe health care reform will have little impact on their business.
How would you rate the federal government's attitude toward small businesses?
Neutral - 27%
Very Unsupportive - 26%
Moderately Unsupportive - 23%
Moderately Supportive - 20%
Very Supportive - 5%
Have you sought additional financing (investment or loan) in the last 12 months?
No, I did not try - 72%
Yes, I tried but failed - 16%
Yes, I secured funding - 12%
Which of the following statements best describes your attitude toward health care reform and how you think it will impact your business?
Will impact my business negatively - 26%
Will have little impact on my business - 23%
Not sure how it will impact my business - 20%
Will impact my business positively - 16%
Don't have enough information to answer - 15%
