Slow and Steady Wins the Race for Small Business Owners, According to the Latest American Express OPEN Small Business Monitor
Small Business Owners Using Analytics and Social Media More Strategically
NEW YORK - Entrepreneurs are making slow but steady progress towards growth, according to the Fall 2013 American Express OPEN Small Business Monitor. The research suggests business owners have abandoned their “wait and see” approach and a third (32%) of entrepreneurs are making growth a top priority.
Furthermore, more small business owners are making capital investments (54%, up from 49%) and hiring plans are up (35%, up from 29%) year-over-year. Entrepreneurs are in a better position to increase investments as cash flow has become less of a concern (52% reported a cash flow crunch, down from 59% six months ago).
Concerning the state of the economy, fewer business owners believe the economy is in recession (25%, down from 30% this spring and 36% last fall), paving the way for increased optimism. When asked about their outlook over the next six months, more than half (56%) have a positive outlook on business prospects and more than four-in-ten business owners (43%) are confident that their revenues will increase. Currently, nearly four-in-ten (38%, up from 27%) say their revenues are greater than they were a year ago and 16% say they have more employees than they did last year (vs. 8% in fall 2012).
“Small business owners appear poised to flip the switch to growth mode,” said Susan Sobbott, president, American Express OPEN. “Business owners are getting more targeted in their approach to building customer demand and an increasing number are using analytics to better understand their customers and social media to drive sales.”
Being More Strategic with Social Media
Social media has become an extremely large part of a company’s overall online marketing process. It helps companies reveal the individuals behind the brand, humanize it and build influence, and it’s essential in order to ensure continued business success.
* While only half (50%) of entrepreneurs surveyed use social media, those that employ it have developed a more targeted approach:
• 71% use social media to attract new customers (up from 57% last fall)
• 59% use it to drive sales (up from 46% last fall)
• 55% use it to create a dialogue with customers (up from 31% last fall)
• 36% use it to create communities where customers can talk to each other (up from 25% last fall)
Building Customer Demand
As entrepreneurs look to expand their businesses, more than half (52%, up from 48% last fall and 44% six months ago) say increased customer demand would most help them to grow. To better target their products and services and interact more meaningfully with customers to increase sales, business owners are deploying a variety of tactics:
* They offer incentives:
• 94% offer incentives to customers for repeat business (up from 89% last year)
They aren’t afraid to ask:
• 94% use customer feedback to improve on products/services
* They get personal:
• 84% say they get to know their customers on a “personal” level to better tailor their services/product offerings
* They know their best customers and what drives their business:
• 77% see value in analyzing sales and customer/other data to better reach customers
• 68% say data analysis makes their marketing more effective
* They look to innovate:
• 64% say the greatest area to innovate in their business is customer service
Managing Work/Life Balance Causes Less Stress
The demands on most entrepreneurs make it tough to develop a work-life balance. However, it appears that their quality of life is improving:
* Fewer entrepreneurs find it stressful to balance their personal life and their business (59%, down from 64% in spring 2007)
* A smaller number of business owners are taking their health for granted (57%, down from 71% in spring 2008)
* On average, business owners are working a half an hour less per day than they were in the fall of 2010 (10.5 hours vs. 11 hours)
Women Give Themselves a Raise, but Many Still Moonlighting
Being an entrepreneur has its rewards but for many they are not monetary:
* More than half of business owners pay themselves a salary (51%, on par with 48% last fall), but on average they are earning less $68,300 compared to $72,000 last fall
• For women entrepreneurs, the opposite is true. Women’s salaries actually went up to $63,000 from $60,000 a year ago
• Roughly one in ten business owners (14%) need to work a second job while running their business in order to make ends meet
• Women business owners are more likely to have to work a second job than their male counterparts (19% vs. 11% of men)
Additional survey results including a full breakdown on the four Small Business Success Index categories, as well as findings by industry, geography and gender, are available.
Survey Methodology American Express OPEN Small Business Monitor, released each spring and fall, is based on a nationally representative sample of 1038 small business owners/managers of companies with fewer than 100 employees. The anonymous survey was conducted via telephone by Ebiquity (formerly Echo Research) September 3-27, 2013. 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.
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