Entrepreneurs remain confident about business prospects, but their top priority continues to be maintaining current sources of revenue. Cash flow concerns have fallen to pre-recession levels (49%, matching fall 2007 and down from a high of 66% in spring 2011). In addition, fewer business owners say they are “stressed-out” by the economy (56%, down from a high of 70% in spring 2011) and more feel confident in their ability to access the capital needed to grow their businesses (72%, the highest figure since the question was first asked in 2002).
This spring, small business owners are on a better path to achieving their long-term goals. According to the American Express OPEN Small Business Monitor, 54% of small business owners say they are on track to save for the retirement they want (up significantly from 37% a year ago) and fewer (65%, down from 73% a year ago) are worried about setting aside the estimated average $1,170,000 they say they need for the retirement they want.
Small Business Growth Pursuits Are Well Within Reach Despite Economic Uncertainty
Regardless of the economic climate, growth plans are still in the cards, as:
- Small business owner optimism is holding steady with more than half of them maintaining a positive outlook on business prospects (54%, unchanged from last spring)
- Fewer say the economy has had a negative effect on their business and its survival is in jeopardy (13%, down from 18% last spring)
- More than seven-in-ten plan to grow their businesses over the next six months (72% on par with 74% last spring)
- More than half (55%, up slightly from 50% a year ago) of business owners plan to make capital investments over the next six months
“The recession’s silver lining is that small business owners have become more adept at navigating an uncertain economy, gaining valuable experience and putting it into practice along the way,” said Denise Pickett, president, American Express OPEN. “While they remain optimistic and confident in their ability to manage their businesses, entrepreneurs are realistic that challenges may arise and look beyond themselves – recognizing the importance of community and networking – understanding they do not have to go it alone.”
As they look to expand, small business owners report that they appreciate the importance of connecting with peers and becoming part of a like-minded community.
- Eighty-one percent say they make it a priority to meet new people for their business
- More than two-thirds of entrepreneurs (68%) say membership in a community of growth-focused business owners would be helpful in growing their businesses
- Nearly four-in-ten (38%) say “connections”-- understanding the power of networking as a key to running a thriving business are most important to be able to grow
Hiring Flat, Productivity Up; Social Media Expert Trumps Accountant as Most Helpful New Hire
Examining the linkage between growth and hiring:
- More than three-quarters of business owners (76%) say they hire as needed when the business grows, as opposed to hiring in order to grow the business (just 14%)
- Hiring plans (35%) are on par with last spring (31%)
- For those that are hiring, a social media expert is the most sought after position (12%, up from 9% in spring 2011), surpassing accountant/bookkeeper (11%, down from 14% in spring 2011)
With hiring lower on the priority list, business owners recognize the value of their current employees especially as they serve customers:
- Nearly all (98%) say providing good customer service is essential to their business success
- More than one-quarter (27%) say their business mantra is “you are only as good as your people” followed by “the customer is always right” (19%)
- Three-quarters (75%) say they communicate openly with employees about the health of the business
- Sixty-eight percent of business owners say the productivity of their workforce has increased over the last year (up from 60% last spring)
Social Media Usage on the Rise; But Many Find it a “Time-suck”
Business owners continue to look for cost effective ways to reach customers:
- An increasing number are using social media for their business (58%, up from 46% last spring)
- Among all entrepreneurs surveyed, more than four-in-ten (43%) say they plan to increase their company’s focus on social media over the next year
- While nearly three-in-ten (29%) say social media has helped their business survive in a challenging economy, more than half (54%) find it to be a “time-suck” or a burden
- Those entrepreneurs currently using social media use it for a variety of reasons including:
- To attract new customers (66%)
- Drive sales (49%)
- Create customer dialogue (46%)
- Gain insights from customers (41%)
- Create communities where customers can talk to each other (29%)
The secret to true happiness? Ask an Entrepreneur
Significantly more business owners say they are:
- “Very happy” with their lives (69%, up from 56% a year ago)
- Women entrepreneurs are more likely to be “very happy” (73%, vs. 66% of men)
- Overall eight-in-ten attribute their happiness entirely or somewhat to being an entrepreneur (80%, on par with 76% last spring)
Additional survey results including findings by industry, geography and gender are available by contacting Alex Della Rocca at 212-539-3203 or firstname.lastname@example.org.
American Express OPEN Small Business Monitor, released each spring and fall, is based on a nationally representative sample of 1150 small business owners/managers of companies with fewer than 100 employees. The anonymous survey was conducted via telephone by Ebiquity Research February 24-March 18, 2014. The poll has a margin of error of +/- 3.0%.
About American Express OPEN
American Express OPEN is the leading payment card issuer for small businesses in the United States and supports business owners and entrepreneurs with products and services to help them run and grow their businesses. This includes business charge and credit cards that deliver purchasing power, flexibility, rewards, savings on business services from an expanded lineup of partners and online tools and services designed to help improve profitability. Learn more at www.OPEN.com and connect with us at openforum.com and twitter.com/openforum.
American Express is a global services company, providing customers with access to products, insights and experiences that enrich lives and build business success. Learn more at americanexpress.com and connect with us on facebook.com/americanexpress, foursquare.com/americanexpress, linkedin.com/companies/american-express, twitter.com/americanexpress, and youtube.com/americanexpress.