Celebrating Small Business Week (Small Biz Daily)

Read study #13 for Womply's sentiment data from a national small business survey.

Read study #13 for Womply's sentiment data from a national small business survey.

By Rieva Lesonsky

Today is the last day of Small Business Week, though here at Small Biz Daily, we celebrate small business every day. I get a lot of surveys of small business owners and I mention many below. Surveys can be instructional—think of them as snapshots of entrepreneurial behavior and best practices.

1—Global Outlook—OFX

OFX, recently announced the results from its 2nd annual SMB Confidence Indicator, showing SMB optimism has dipped a little compared to last year. While 57% are positive and undeterred about conducting business internationally, despite the change in political climate, trade war rumblings, threat of hikes in border taxes and rising popularity of nationalism both at home and abroad. For 63%, international growth is “good to booming.” Their goals for 2017 include, expanding into new international markets, adding more foreign suppliers and hiring skilled workers from abroad.

It’s easier than ever to expand internationally due to new online commerce channels and tech tools.

Small Business Global Economy Outlook

  • 57% are confident conducting business overseas
  • 63% of global small businesses report positive growth
  • 36% currently have customers in 2-3 countries outside of the U.S.; 31% have customers in 4 – 10 countries
  • 65% have suppliers or vendors outside of the U.S.
  • Retail/e-commerce, business services and consumer products are the top three industries with the most overseas operations.
  • Quality continues to be more important than cost: 26% are looking offshore for access to higher quality talent, as opposed to cheaper talent (20%)

Market Opportunities with Overseas Operations

Top international markets where SMBs currently operate, in order: 

  • Canada
  • Mexico
  • Western Europe (UK, Ireland, France, Belgium, Netherlands, etc.)
  • China/Hong Kong & Japan

Markets SMBs are planning further expansion in 2017, in order:

  • Canada
  • Western Europe
  • Mexico
  • China/Hong Kong & Japan
  • South America

Opportunities SMBs cite for international expansion

  • Expanding to new markets
  • Adding better suppliers
  • Tapping more skilled talent
  • Tapping cheaper talent
  • Opening another office

Market Challenges with Overseas Operations

Challenges SMBs face when doing businesses overseas ranked: 

  • High taxes and tariffs
  • Border delays/inspections
  • Language barriers 

Top concerns over current global events

  • Global market instability
  • Rising U.S. interest rates
  • Global terrorism

Top three concerns with trade relations

  • Free flow of trade and commerce
  • Customs duties
  • Foreign currency fluctuations

2—Tech Tools—Endurance International Group

A survey by Endurance International Group identified the tools small business owners want that make the most of their limited time. Most (89%) of the small business owners surveyed work from home, which they say helps them get their work done faster.  But 67% say working at home comes with many distractions, including:

  • 21% – Kids
  • 17% – Household chores
  • 12% – TV
  • 10% – Pets

What tech tools do the SMBs rely on? Tools with the most potential to help them grow include:

  • 41% – Social media
  • 20% – Mobile payment apps, such as mobile wallets, Square and
  • 11% – Big data and analytics reporting tools
  • 7% – Internet of Things (i.e., wearables, smart homes, connected cars)
  • 6% – Artificial Intelligence (i.e., chat bots, personal assistants)
  • 4% – On demand delivery services (i.e., Postmates, UberRUSH, delivery drones)
  • 4% – Cybersecurity solutions
  • 3% – Augmented or virtual reality
  • 1% – Blockchain technology

Their favorite social channels:

  • Facebook – 75%
  • LinkedIn – 41%
  • Instagram – 36%
  • Twitter – 34%
  • Yelp – 10%
  • Snapchat – 7%

If they had an AI robot to delegate to they would tell it to:

  • 46% – Manage social media accounts
  • 45% – Update their website
  • 41% – Handle marketing/advertising needs
  • 34% – Screen my calls and emails
  • 32% – Data entry
  • 31% – Generate invoices
  • 27% – Manage customer orders
  • 25% – Manage my calendar
  • 17% – Reorder supplies

3—“Made in America” Resonates with Small Business Shoppers—Cox Business

An overwhelming number of Americans visit a local small business at least once a week and 27% go to small businesses twice a week. According to the 2017 Cox Business Consumer Pulse on Small Businesses, only 8% of survey respondents don’t visit any type of small business in an average week.

The top reasons they go the “Main Street” route are:

  • Local support – 67%
  • Convenience – 63%
  • Greater customer service (than a large business) – 50%
  • Familiarity between respondents and small business owner/employees – 45%
  • More competitive pricing – 14%

Consumers think both local (67%) and federal government (82%) agencies should do more to promote small business growth in their communities.

Patriotism fuels some of their shopping decisions:

  • 70% would spend more money at a small business if they only sold U.S.-manufactured items
  • 85% say shopping/dining at small businesses make them feel like they’re supporting the American workforce and economy

4—Do You Have a Safety Net?—FreshBooks

In an extensive survey of self-employed professionals, FreshBooks discovered many small businesses are unprepared:

  • 51% are unprepared should a large invoice not get paid
  • 48% aren’t prepared if they were to get sued
  • 39% are unprepared if they were to suffer a disability or not be able to run their business
  • 42% haven’t planned for retirement, despite a median age close to 50

How Independent Professionals and Small Business Owners Manage Their Finances

Almost half, 46%, say they should be managing their money better; 28% have already made financial mistakes and 28% say managing business keeps them up at night.

  • 54% wish there were more alternatives to big banks
  • 52% say big banks aren’t designed to serve the needs of small business
  • 25% have been rejected as borrowers because of their occupational status

There’s so much more in the report. Please check it out here.

5—Local Marketing Habits—Netsertive

Netsertive recently released a survey about local marketing habits of small businesses. The key findings include:

Most Small Businesses Lack a Social Media Marketing Strategy: 49% don’t have a formal social media marketing strategy. Their ability to execute social media campaigns is falling short, as only 26% claim to have “advanced” knowledge of social media marketing while 24% call themselves “novice” and 30% say they’re “intermediate.”

Small Businesses Are Still Struggling to Attract Customers with Social Media Marketing: 42% say Facebook is the best social channel for driving sales; however, the same number aren’t able to tie their social media marketing efforts directly to in-store traffic. 9% of small businesses say Twitter is valuable to their businesses, followed by 6% for Instagram.

Small Businesses Lag Behind their Customers in Adoption of Instagram: Facebook is the favorite social marketing channel among small businesses (64%). Only 33% use Instagram.

6—Is Your Bank Meeting Your Needs?—Bill.com

According to a recent survey from Bill.com, small businesses maintain a tenuous connection to their banks. Only 48% say they’re committed to their banks in the future and wouldn’t consider switching to a non-traditional online banking service, 43% are unsatisfied or unsure if their bank’s current offerings meet expectations and 52% would either consider a non-traditional online banking service or are unsure as to whether they would commit to their bank over a non-traditional online banking service in the future.

Almost half (48%) of millennial SMB owners would primarily rely on a mobile channel for business banking transactions, compared to 18% of SMB owners aged 45-59, who still rank in-person branch experiences as their #1 channel

Check out the full report here.

7—Risky Behavior—Hiscox

Hiscox’s most recent DNA of an Entrepreneur Report  shows 61% of U.S. small business owners don’t have a succession plan in place. Even more surprising—65% of those aged 50 and older haven’t planned for succession.

Hiscox says you should assess your uninsured risks. It found the top five risks U.S. small business owners worry about, but don’t currently insure against include:

  • Non-payment by customer (34%)
  • Unforeseen events such as a pandemic or economic crisis (24%)
  • Being sued by a customer (23%)
  • Hacking/cybercrime (21%)
  • Reputational damage (17%)

The report also shows funding is still a hurdle for many small business owners. Bank funding has become more difficult to get. And 44% of newer businesses (four years old or less) draw on outside sources of income to help fund or develop their businesses

8—How Parents Influence Entrepreneurs’ Success—Funding Circle

Funding Circle surveyed entrepreneurs to find out how their parents influenced their success. Survey highlights:

  • Strong work ethic was the number one skill that both moms (67%) and dads (74%) taught them, followed by confidence (41% and 49% respectively) and resilience (40% for both).
  • 71% never sought advice from a parent regarding business matters during the first few years of starting their businesses
  • 72% never borrowed money (or accepted an equity investment) for their business from a parent and would never even consider doing it.

Small Business Owners are Optimistic

9—Optimism Fuels “Main Street”—Allstate

In an analysis of America’s small business environment, the 2nd annual Allstate/USA TODAY Small Business Barometer finds increasing optimism and innovation among small business owners, despite the rising cost of doing business. In fact, 91% of local entrepreneurs say the benefits of owning a business outweigh the challenges.

The 2017 Allstate/USA TODAY Small Business Barometer produced an overall score of 58 for the country’s small business sector, which rates as “solid” on the Barometer’s 0-100 scale.

Optimism and innovation are surging: 64% of small business owners say there’s never been a better time to own a small business. Among key demographic groups, business owners under 50, veterans and African Americans report higher optimism and better business performance.

Key findings include:

  • 50% experiment with new business practices to provide their customers with new goods or services.
  • 64% say their businesses are doing well and 72% are optimistic that they’ll do well in the coming year.
  • 55% say their business’s revenue increased in the past year
  • 34% have hired a new employee in the past three months & 42% are currently hiring or expect to be hiring in the next three months

Despite increased optimism, small business owners are still stressed. Stress contributors include:

  • Managing business responsibilities and demands
  • Family pressures and health problems for those in the family
  • Obtaining new clients or customers & retaining existing customers
  • Dealing with sales and marketing
  • Maintaining a work-life-balance
  • Managing cash flow

There’s a lot more information you can find here.

10—SMBs “Cautiously” Optimistic—Business.com

While almost 70% of small and medium business (SMB) owners are optimistic their businesses will see business growth, expansion, or increased revenue over the next 12 months, their enthusiasm is tempered by unease over political uncertainty in Washington, according to a new survey released by Business.com, which was recently purchased by Purch.

Their optimism is driven by promises of deregulation by the Trump administration, with 61% saying the promise of deregulation has impacted their business investment plans. The SMBs say excessive regulations hinder hiring (56%) or block investment in new technology, software, and equipment (33%).

They do see some threats to their company’s survival:

  • 32% – taxes
  • 26% – political uncertainty
  • 21% – regulations

11—Optimism Leads to Investment—Citizens Bank

The Citizens Bank Small Business Pulse Survey also shows 51% of SMBs expect significant improvement in the national economy and 46% expect their regional economies to shine in 2017. And 69% believe their financial futures will improve in the next 12 months.

This confidence is the likely reason 81% of businesses plan to increase their investment in technology in the next year. Other key findings from this year’s survey include:

  • 95% believe technology will impact the future success of their businesses
  • 81% plan to increase their investment in technology
  • 44% think tax policy changes will impact their business
  • 67% don’t believe regulatory changes will impact their businesses

For a copy of the Citizens Bank Small Business Pulse Survey, please go here.

12—Business Owners are Confident—PNC Bank

Optimism among business owners about the U.S. economy and the outlook for their own businesses has reached levels never-before seen in the 15-year history of the PNC Economic Outlook. An amazing 88% of those surveyed are optimistic about the near-term outlook on the national economy and 89% their local economies

And in the next six months:

  • 94% are optimistic about their own company’s outlook
  • 62% anticipate sales increases
  • 57% anticipate an increase in profits
  • 28% expect to add full-time employees

The survey also examined business owners’ thoughts on the new Congress and Administration in Washington: 42% say they expect the policies of the new administration and Congress to positively impact their businesses, 32% say it’s too early to predict, 17% say it will have no impact and 9% anticipate a negative effect.

Less than half (44%) of the business owners would anticipate a bump in profits if regulations were eased or eliminated. When it comes to hiring, 32% say reductions in regulations would have a positive impact.

When asked specifically about potential policy reform, corporate tax reform is the single most anticipated change. Nearly 70% are in favor of it. Regarding tariff restrictions, 33% support them, 32% oppose and 31% are unsure.

A digital package containing national and regional survey results is available on PNC’s website at http://pnc.mediaroom.com/digital-packages.

13—Optimists vs Pessimists—Womply

A study from Womply shows 40% of Trump voters believe his election is their top reason for business optimism, while 70% of Clinton voters say it’s their #1 reason for pessimism. The study also shows that business confidence has a significant impact the intentions if small business owners.

  • Optimists are 3.5x more likely to hire and give raises to employees this year
  • Pessimists are 6.5x more likely to reduce staff headcount and employee pay

Small business care A LOT about tax reform, but are divided on healthcare reform:

  • 36% of small biz owners say taxes are the policy area they most want changed
  • 29% say that Obamacare repeal would have no impact on their business
  • 23% say they can’t form an opinion without knowing what law would replace it

You can read the full report here.

Quick Links

14—Growth Lessons—Google Primer

If you want to grow your business, you can never stop learning. To help education you, Google just launched Google Primer, a free mobile app offering bite-sized lessons for businesses that can be accessed wherever and whenever you want. The new lessons cover budgeting, bootstrapping, customer relationships and staying energized.

In addition to the Primer, Google will continue to host its free Get Your Business Online workshops. Check out the list of upcoming events here.

15—Best Mobile Payment Apps—LendEDU

LendEDU did a survey about mobile payment apps. They found:

44% – Venmo

35% – don’t use a mobile payment app

14% – use their bank’s mobile payment app

4% – said “Other”

1% – Square Cash

16—Supporting Small Businesses—Chase

JPMorgan Chase announced this week $2.2 million to support underserved and minority-owned businesses, which is part of its three-year, $75-million commitment from its Small Business Forward initiative. Money is going to programs in:

  • Brooklyn: supporting the growth of 240 small businesses in the high-growth manufacturing industry with an emphasis on underserved entrepreneurs and job creation for low and moderate income persons.
  • Morehouse College Entrepreneurship Center: to develop a new program, Ascend 2020 Atlanta, and help grow hundreds of minority and women-owned technology companies in low income communities across Metro Atlanta.