Small Business Report Offers Findings for Informed Business Decisions

06/02/2015

Forbes | Steve Olenski

As the fabric of our nation’s economy, small businesses continue to deliver growth and opportunity. However, like all other organizations, small businesses need to have an understanding of their external and internal environments in order to make the informed business decisions that leverage those opportunities. Recently, small business success, Wasp Barcode Technologies decided to survey 1,000 small businesses to determine staffing, hiring, IT spending, economic confidence, and revenue growth projection trends for this year.

Participants included business owners and senior management from primarily North American companies in a range of industries, including retail, healthcare, agriculture, manufacturing, education, government, technology, hospitality, energy, construction, financial, non-profit and more. Here’s a summary of what they had to say about 2015 small business trends:

Economy and Revenue Growth

• 35% of those surveyed are somewhat optimistic about the economy while 31% see no change in economic conditions this year.
• 57% expect revenue growth this year with those in the product segment expecting the most growth.
• To achieve revenue growth, more than half of the small business owners are focused on improving the existing customer experience while others plan to invest in new customer acquisition activities, expand into new markets, launch new products, invest in employee tools and training, and hire new staff.

Key Business Challenges

• Growing revenue
• Hiring staff
• Funding employee healthcare
• Increasing profitability
• Addressing government regulations
• Establishing cash flow
• Raising capital/funding (smallest sized businesses only)

Marketing Investment and Use

• 56% of SMBs invest 3% or less of their revenue in marketing while the national average for marketing budgets is 10.2% per Gartner Surveys.
• The top marketing tools include social media (61%) and e-mail marketing (46%).
• Only 35% of SMBs say their company website is very important to extremely important to their success, which seems low considering how consumers and businesses use these sites to conduct research and make purchase decisions.
• SEO is halfway down the list of 14 types of marketing tools available, which is way too low for what it can accomplish for small business owners.
• PPC is near the bottom of the list of 14 marketing tools while traditional tools, such as print ads, direct mail, and TV/radio are toward the top of the most used marketing tools by small businesses in this survey. This prioritization of marketing tools seems skewed given the overall shift with customers and consumers to online platforms. This means a lot of missed opportunity to reach out and engage with potential and existing customers. It may also explain why 26% of these SMBs say only 10% of their business is generated online and 37% say it’s only 1% to 5% of their business. These findings show there is significant untapped opportunity.
• 40% of SMBs do not even have one dedicated marketing staff while 36% have 1-2 dedicated marketing employees. Given the above goals to achieve their revenue growth and key challenges, marketing appears to be low on the list of priorities in terms of investment.

IT Investment and Inventory Management

• 38% reported that they will increase their IT investments this year while 46% of the companies surveyed that have 100-499 employees will focus on IT to achieve revenue goals and address key challenges.
• 46% of small business owners surveyed do not currently track their inventory or still use manual processes rather than automating this function. Wasp Barcode Technologies noted that the Small Business Administration noted that poor inventory management was one of the main reasons small businesses fail.

Putting it in Perspective

The findings from this business report show areas of opportunities that small businesses still do not realize are there and are missing out on significant marketing and technology tools that can address both their revenue goals and solve some key business challenges. That means there is more to do to help these small businesses make truly informed business decisions by educating them on new online marketing platforms and automated solutions.

The views expressed by the author are not necessarily those of Fifth Third Bank and are solely the opinions of the author. This article is for informational purposes only. It does not constitute the rendering of legal, accounting, or other professional services by Fifth Third Bank or any of their respective subsidiaries or affiliates, and are provided without any warranty whatsoever. Deposit and credit products provided by Fifth Third Bank, Member FDIC.