Survey: Sector will be central to economic recovery.
Small business owners are signaling confidence in their own businesses despite their belief that the economic recession will continue into 2011, according to results of the 2010 U.S. Bank Small Business Annual Survey. The survey also revealed common characteristics of small business owners today. They are resilient survivors who are always on the go. They make time for friends and family, and giving back to the community is a priority.
“The results prove a truth we all embrace, that American small business owners are resilient and they are survivors,” said Rick Hartnack, vice chairman at U.S. Bancorp and head of consumer banking. “There is no question that this sector will be central to our economic recovery. Taking the time to listen to their perspective and understand what motivates them is essential to providing the financial, legislative and moral support they need to thrive.”
Most Believe Recession Will Persist
Small business owners uniformly agree that the U.S. economy is in a recession, but have a slightly more positive outlook on the business conditions in their local markets. Specifically, nine of 10 small business owners feel the economy is currently in a recession, and nearly eight of 10 feel we will still be in a recession next year. When asked about the conditions in their state for small businesses, three of 10 feel their state is better than the rest of the country.
- 89 percent believe the economy is still in a recession;
- 75 percent think the economy will still be in a recession in 2011;
- 32 percent feel their state has better conditions for small businesses than the rest of the country.
Confident in Ability to Weather the Storm
Despite the current economic climate, most remain confident in their own company’s ability to weather the storm. Even though small business owners have faced challenging economic times, many feel their business is financially healthy and anticipate higher revenue in the year ahead. Generally speaking, small businesses have survived, and they are strong. At the same time, over half of small business owners feel this is not a good time to start a business. Poor sales were cited most frequently as the biggest challenge facing their business today.
- 56 percent report revenue in line or higher than last year;
- 47 percent expect revenue to be higher next year;
- 63 percent say their company is financially healthy.
Resilient and Proven Survivors
They are proven survivors when it comes to persevering through business challenges and downturns. Small business owners are able to maneuver through and survive business challenges. In the past, over four of 10 have faced and survived a crisis that significantly impacted cash flow and nearly destroyed their business. The most commonly cited reason was because they lost their biggest client. For the future, over half feel healthcare reform will negatively impact small businesses. In addition to these challenges, about half agree that owning a small business can be lonely.
- 44 percent survived a serious financial crisis;
- 37 percent have faced a crisis because they lost their biggest client;
- 55 percent believe healthcare reform will negatively impact their business.
Dedicated, Motivated Self-Starters
They are always on the go. Maintaining flexibility, finding the right work/life balance and giving back to the community are top priorities. Small business owners are extremely busy between running their business, making time for family and friends, and giving back to the community. Although they are always on the go, half do find enough time for family and friends and three-fourths plan to take at least one week of vacation this year. They define themselves by their work ethic, resourcefulness and ability to solve problems.
- 65 percent say they are almost always on the go;
- 50 percent feel they allocate plenty of time for family and friends;
- 58 percent think it is important for their business to give back to the community.
Want Their Bank to Know Them Individually
Small business owners see themselves as individuals and they would like their bank to adjust to meet their individual needs and get to know them and their business better. When asked to identify the most important thing they would like to see from their bank that they’re not currently experiencing today, four of 10 small business owners say they want their bank to meet their individual needs and know them and their business. Three out of 10 want their bank to deal in a more straight-forward manner.
- 41 percent say they would like to see their bank meet their individual needs better;
- 39 percent want their bank to know them and their business better;
- 30 percent want their bank to deal in a more straight-forward manner.
Scope and Demographics
The survey produced national results, as well as a deeper look at ten key metropolitan regions: Minneapolis and St. Paul, Milwaukee, Northern California, Southern California, Denver, Portland, Seattle, Cincinnati and St. Louis. Researchers heard from 2,725 owners of businesses with $10 million or less in annual revenue.
- Average annual revenue: $865,000
- Average number of employees: 12 (25 percent sole proprietorships)
- Average years in business: 15
- Location: 33 percent urban, 45 percent suburban, 21 percent rural