Small business owners practice what they preach - supporting America's small business and other entrepreneurs.
According to the American Express OPEN Small Business Monitor, 70 percent of entrepreneurs say they purchase and source goods and services from other small businesses.
Additionally, nearly all small businesses (96%) said they're committed to supporting their local communities through a variety of activities. These included donations to local causes (70%), participating in community projects (49%), and shopping at independently-owned businesses in their neighborhoods (83%) for non-business purchases.
Susan Sobbott, president of American Express OPEN, says the results are inspirational and that small businesses remain steadfast optimists and loyal to their local communities, despite any economic concerns.
“Adversity is nothing new to the vast majority of entrepreneurs, and our research shows that while they have concerns about the near future, they have learned a great deal from recent trials and are better positioned to grow in the long term," said Sobbott.
Long-Term Optimism vs. Short-Term Realism
AMEX also sees that small business owners are balancing their optimistic long-term views with realistic short-term decisions. More than half (54%) of small business owners remain optimistic about their business prospects, but the uncertain economy remains the top challenge to growth.
So, owners have a sense of trepidation in their short-term business plans and perspectives. One tell-tale sign? Only 50% of small business owners plan to increase capital investments over the next six months. That's about the same as six months ago.
Another challenge? For the first time in two years, cash flow concerns are on the rise for small businesses -- from 53 percent of those surveyed last fall to 59% today.
Entrepreneurs Get Satisfaction
Despite those factors, a large majority of business owners (92%) say they're happy with their lives. More than three-quarters of those say their happiness is due somewhat or entirely to being an entrepreneur.
Sixty-six percent would recommend the entrepreneurship path to a friend or family member; that's up from 55 percent in fall of 2009.
Hiring Remains Steady
American Express that while many business owners’ hiring plans are tempered by the realities of the economy, 31 percent plan to hire in the next six months.
That's on par with last fall (29%) and last spring (35%). However, 35 percent say they do not need to hire in order to grow their businesses, up from last fall (24%) and last spring (26%).
As a likely result of stagnant hiring, small businesses are looking for greater productivity from current employees. There is also evidence that they recognize great work and its connection to business growth, said American Express.
Nearly three-in-ten surveyed (29%) say their business mantra is “you are only as good as your people”. Those who adopt this mantra are more likely to reward their employees and benefit from a more productive workforce:
- Nearly three quarters of business owners whose mantra is “you are only as good as your people,” (72%) say the productivity of their workforce has improved over the last year, versus 60% of the total survey population;
- More than four in ten (42%) who follow this mantra plan to reward employees for a job well done and give raises (on average of 8.2%) this year, versus 28% of the total survey population (average of 7.5%).
Small Businesses Tweets
After years of growth in the use of social media by small businesses, just 46 percent said they use a social media platform for their business, on par with this past fall (49%).
Seventy percent say they use social media to attract new customers (up from 57% in the fall) and 44 percent use it to create a dialogue with customers (up from 31% in the fall).
American Express OPEN Small Business Monitor, released each spring and fall, is based on a nationally representative sample of 933 small business owners/managers of companies with fewer than 100 employees. The anonymous survey was conducted via telephone by Echo Research February 22-March 12, 2013. The poll has a margin of error of +/- 3.2%.
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