Although the recession still lingers, the economy is starting to improve, according to nearly 3,000 small business owners nationwide who were featured in the 2011 U.S. Bank Small Business Annual Survey.
Other highlights of the survey include:
• small business owners are seeing some signs of improvement, but remain cautious about the future (only 26% report higher sales this year);
• economic uncertainty is their biggest concern;
• the job outlook is stabilizing and
• social networking is gaining influence, e-mail rules.
While in 2010, 89 percent of small business owners thought the U.S. economy was in a recession, that number dropped to 78 percent in 2011. The number is still high and more small business owners view their state’s economic condition as weaker than the national economy. About 64 percent of small business owners report revenue in line with or higher than last year, as opposed to 2010 when only 55 percent said revenue was as good or better than the previous 12 months. Only 10 percent of business owners expect revenue to be lower next year. Most (70 percent) expect to keep staffing levels intact over the next 12 months, 22 percent say they plan to hire.
“We are heartened to see the outlook improving, but there is still work to do. Small business owners are starting to see the recessionary clouds part, but for many the recession remains,” said Rick Hartnack, vice chairman and head of consumer and small business banking at U.S. Bank. “At U.S. Bank, we increased small business lending in 2010. For example, our branches increased small business loans outstanding by over 22 percent year-over-year. We hired an additional 150 small business specialists in key markets and we’re still hiring today. This survey is one of the many tools we are using to listen to small business owners, understand their needs and understand how we can help them grow and prosper. Things are starting to improve, and for the thousands of small businesses that will help our economy grow, and we are ready to support them.”
The single biggest challenge facing small businesses is economic uncertainty, according to 27 percent of respondents. Poor sales were the second most common reason, followed by federal regulations, competition and taxes. A possible reflection of the feelings of uncertainty, is only 20 percent said they borrowed or tried to borrow money during the last six months.
Technology has an increasing influence on economic indicators. Sixty-nine percent of those polled said they could not do without e-mail/computer, with 64 percent saying they can’t do without their mobile phone. Social networking is gaining prominence and those using it for networking or business development increased seven points from last year to 39 percent in 2011. Most used were Facebook (74 percent), LinkedIn (57 percent), followed by industry communities (26 percent) and Twitter (23 percent).
U.S. Bancorp at with $311 billion in assets as of March 31, 2011, is the parent company of U.S. Bank, the fifth largest commercial bank in the United States. The company operates 3,082 banking offices in 25 states and 5,238 ATMs and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions.
Sources Used:
“Small Business Owners’ Outlook Starting to Improve, many Remain Cautious According to 2011 U.S. Bank Small Business Annual Survey.” Yahoo Finance. June 23, 2011.
“Sink or Swim,” Small Businesses Survive in Tough Economy.” WTVM.com. June 21, 2011.