According to the U.S. Census Bureau, there are more than 27 million small businesses in the United States, employing more than 40 million people1. "American small businesses are the bedrock of the U.S. economy, generating more new jobs than big corporations, but they find themselves without assistance from the government during these unsettling times," said Roy Dunbar, CEO of Network Solutions. "Network Solutions believes it is especially important now to establish a way to monitor the health of this vital segment of our economy, so that all who serve this constituency will be able to better address their needs and help them succeed."
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 Small Business Success Index identifies and measures the factors that lead to success.
"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."
Key Findings from the Small Business Success Index:
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 5 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 it 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
- 26% plan to increase their internet marketing budgets, including online advertising and website development
