So Long, 2009
Many businesses have likely said a fond farewell to 2009, as 66 percent of small business owners say the recession had some level of negative effect on their business, with 23 percent rating the impact as very negative.
The sting of the recession is evident in how small business owners rate their company's performance over the past year. In 2009, 46 percent of small businesses fared as they expected, giving their business a C. Thirteen percent gave their business a B rating and only five percent gave themselves an A. Twenty-six percent say they did not have the year they planned on in 2009, giving their business a D, and an unfortunate 10 percent rated their company with an F, saying their business landed in serious trouble.
The economy wasn't the only concern for small business owners in 2009. Aside from the recession, 38 percent said their biggest hurdle was retaining and growing their customer base, while managing cash flow was the toughest challenge for 34 percent of respondents. Keeping healthcare and insurance costs in-line (15 percent) and staffing issues (eight percent) were also sources of stress. Still, if given the chance, 35 percent of small businesses say they would have done nothing differently in 2009, while 24 percent would have done more sales and marketing.
Interestingly, nearly a quarter (24 percent) say the recession had no influence over their business' performance in 2009, and 10 percent say they grew their business despite the recession. And for the slim five percent who report that 2009 was their best year ever, it appears that streamlining costs (29 percent), innovating with the right products and services at the right time (24 percent), and shrewd forecasting (22 percent) were the keys to their success last year.
New Year, New Hopes
The start of a new year offers time for reflection on hopes and resolutions, and small business owners have plenty of each for their companies. If they had but one wish for their business in 2010, 41 percent would wish to see an uptick in the overall economy as early as possible, while 20 percent wish to win a large piece of new business or make a big sale. Nineteen percent hope to realize a year-end profit once their 2009 financial books are closed, and being able to reward loyal employees in a big way is the number one wish for 13 percent of respondents.
What will small businesses do to make sure 2010 is as successful a year as possible? The top business New Year's Resolution, at 45 percent, is to save more and spend less, which also happens to be the number one personal New Year's Resolution for 41 percent of small business owners. Thirty percent resolve to devote more of their time to sales and marketing efforts, while 10 percent aspire to execute those operational improvements they've been contemplating.
Meeting Challenges and Opportunities Head-On in 2010
What does 2010 look like for small business owners? Many small businesses anticipate better times, with eight percent believing 2010 might be their best year ever, and 28 percent looking forward to solid growth ahead of projections. The largest group, at 51 percent, expects their business to perform the same as in 2009. Eight percent expect to do worse in 2010, with five percent saying their business will be in peril.
Although many small businesses are optimistic about the recovery, they're cautious about how long it might take to get there. Only four percent anticipate that the first quarter of 2010 will bring relief, while 36 percent of respondents believe it will take until at least the third quarter of 2010 before their business no longer feels the impact of the recession. And it won't be until sometime in 2011 before 43 percent of small business owners break free from the recession's grasp.
Nevertheless, small businesses have their focus on the future. The majority, at 53 percent, believe that an improving economy will be their biggest business opportunity in 2010. Twenty percent think that promoting their business via social media and networking sites will bring the most opportunity, while 15 percent will try to take advantage of a better competitive landscape and a large pool of available talent.
Small businesses also have big plans to stimulate growth, considering several new measures this year, with 43 percent focusing on growing relationships with their existing customers. Twenty-two percent will invest in more marketing, while 17 percent will look to add value by offering a greater variety of products and services. A price reduction on products and services is being considered by 10 percent of respondents.
Small businesses remain strongly tuned-in to the realities of guiding their company through tough economic times. When asked what one thing about their business keeps them up at night, 41 percent of small business owners said it is the uncertain economy, followed by managing cash flow (meeting payroll, paying suppliers) at 29 percent. These were followed by coping with healthcare and insurance expenses (15 percent) and rising energy costs (5 percent).
"There's no question that the effects of the recession will continue to be felt in 2010, but small businesses that are following a sound business plan, making adjustments where necessary, and preparing strategies for an economic recovery are positioned to fare well in the new year and beyond," said Graziano. "No matter how big or small the company, TD Bank stands ready to assist business owners with the guidance they need to make the right financial decisions for their business' future growth."
