"Small business owners can use the current economic downturn to make their companies more successful,” 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 taking actions to become more efficient in what they do and getting better at working in teams are also the ones who are externally focused on their customer base to introduce new products and services that benefit their customers. These will be the companies that thrive when the economy recovers."
“Like most of us as individuals reacting to the recession, small businesses have made significant adjustments to their finances,” said Roy Dunbar, Chairman and CEO of Network Solutions, LLC. “In doing so, they are showing characteristic resilience and creativity. Even though many owners have suffered a reduction in income from their business, their passion and optimism remain high.”
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. 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.
Key Findings from the June 2009 Small Business Success Index:
Small businesses have become more optimistic about their future:
- In June, more small businesses expect the economy to improve than decline in the next 12 months, with 38% expecting improvement compared to 28% who expect decline
- When asked the same question six months ago, only 23% expected improvement and 48% expected decline
Small businesses have experienced positive effects from the economic downturn:
- 66% say the economy has led them to find new ways to operate more efficiently
- 42% believe the economy has caused their company to become a better team
- 42% have found new products and services to benefit customers
- 26% have reduced inefficient or unnecessary staff
Small businesses have also been hit with some negative effects of the recession:
- 30% of small business owners believe their access to capital is not sufficient
- 41% of small business owners have had to accept a lower standard of living
- 30% of small business owners report the recession has hurt employee morale
- 19% of small business owners say they have had to reduce valuable staff
- Some small businesses have cut employee benefits, with 15% reducing their retirement savings plans and 3% eliminating this benefit in the past 12 months
- Small business have also reported changes to health insurance benefits, with 19% increasing the benefit and 22% decreasing the benefit level in the past 12 months
- Rising healthcare costs are a “major problem” for 48% of small businesses with employees
