According to a recent survey, small business owners do not necessarily think the grass is greener on the other side. When it comes to the impact of the recession, they think their competitors were harder hit.
The above chart is from a recent Network Solutions survey conducted in conjunction with the University of Maryland’s Business School, in December 2008 and January 2009.
I thought it remarkable that nearly half thought their competitors had been significantly impacted by the downturn. Yet, just a little over a third reported their own businesses being significantly impacted. And 31% thought their own businesses had been relatively unscathed — nearly twice the number who thought the competition was left unscathed. It almost seems as if business owners are counting their blessings.
Roy Dunbar, CEO of Network Solutions, says he was struck by how optimistic small businesses are, especially considering that the survey was taken deep in the midst of the economic downturn. “Frugality is a hallmark of how [small business owners] look at the world. They’ve been through tough times before and know how to get through them now,” he said in an interview I conducted earlier this week.
Network Solutions plans to conduct regular surveys and has developed an index called the Small Business Success Index. The SBSI Index is an ongoing measurement of the overall health of U.S. small businesses. The company has set up a dedicated website for the initiative.
Dunbar said Network Solutions wanted to discover the characteristics of those small businesses that are successful. That way they can help by giving prescriptive advice to small business owners about how to become more successful. The company chose to publish the information on a separate research-oriented website where they are not selling anything, because they want it to be a source of helpful information above all.
You can take the survey yourself online. You will get an immediate score. I took it and Small Business Trends LLC got a score of 81 (the average is 75). Take the survey yourself.
Alex J. Caffarini
I’ve long believed in the importance of optimism, especially in hard times like these; and I like it when fellow business owners are generally optimistic.
Although the findings of this survey suggest a high level of small business optimism, I seem to have more questions than answers.
It would be helpful to know how Network Solutions and the University of Maryland Business School defined “small business” for the survey and how the sample for the survey was selected.
Also, knowing the breakdown of these small businesses by industry and region would have also been nice; some industries and regions are hit harder than others.
Also, if the respondents to this survey felt their competitors were harder hit by the recession, it’s still their own perceptions. On what factors did they base their opinion?
Before we put any faith in the findings of this survey, we need more information about how it was conducted.
Hi Alex, that’s a good question. Here is what the abridged survey report says about its methodology:
“The baseline for the Small Business Success Survey was conducted in December 2008 through January 2009. A total of 1,000 small business owners were interviewed by telephone. Small businesses included in the study were privately owned (not publicly traded), for-profit, had fewer than 100 employees, and had a payroll and/or contributed to at least 50% of the owner’s household income. The data are weighted to ensure representativeness to the entire population of small businesses in the U.S.
The survey is longitudinal in nature, and will track trends in Small Business Success over time. These are the results from the first wave of data collection.
The survey is sponsored by Network Solutions, LLC and the Robert H. Smith School of Business, University of Maryland. Rockbridge Associates, Inc., an independent marketing research firm, conducted the survey.”
Read the abridged survey report (PDF).
I read this twice and a voice kept coming up, “Why should I care about this?”
If you answered this in your post, it surely breezed by me.
I also hear, “So what?” So what if my competitors thinking about the economy is different than mine.
I seem to find this missing from quite a few of your posts. Could you be trying to stay too neutral you are purposedly leaving this out? I’m looking for some stronger opinion than the, “okay, I read this, here it is again. I’m just re-digesting this as a journalist who doesn’t have any opinion.”
I think optimism has incredible value and remaining optimistic in times like these is what will give small business owners enough strength to stay focused and determined – and pull their business through this economic downturn.
As a Master in the Laws of Attraction, yes, I’m a big beliver in positive energy which you may be referring to as optimism. However, there’s a balance not to allow optimism to be the covers we pull overselves either…like crawling back into bed and pulling the covers up over us.
When I take the time to reach something, I want value. Value is key today.
So in order to better express what I said before…where’s the value in having this information? I didn’t get it.
Catherine, thanks for sharing your opinion.
My goal is to get people to think and converse.
I like to lay subtle seeds for discussion.
In this particular case, I lay the seed that the economy is not nearly as bad as the media makes it out.
Business owners perceive others as being harder hit than they themselves are. Why? Because they hear how bad things are, 24/7 in the media. So they ASSUME things must be REALLY bad. That’s one explanation for why they think their competitors must be worse off. But maybe, just maybe, things are not that bad, judging from their own condition.
That’s my interpretation — and just one of several conclusions.
However, I was hoping a reader would reach that conclusion on their own and bring it up for discussion, whereby I could jump in and say “that’s a great point” without my constantly imposing my own conclusions on them every day. 🙂
This is a two-way conversation on this site.
Gottcha. Thank you. I can see I’m in a different place. I’ve never bought into the media muck because I remember the change of the century confusion they caused with their doomsday opinion of what computer digits were going to do to our lives.
Well, I guess this accomplished what you wanted…conversation…feedback…because I almost never say anything. Chuckle. But when I do…okay I’ll stop there.
Despite the persistent pessimism in the media small business owners are still positive. I would guess that the disparity here is somewhat caused by all the hype, but I hope that small business owners keep injecting some good vibrations into the economy so we can get things rolling again.
Thanks for taking a look at the Small Business Success index and for this article. On your point regarding conversations I have to tell you when the results of this came out I thought of how small businesses who score low on some points of the index can probably find resources on sites like this or look for stories that are being shared by other small business. How to find capital? or how to get help with capital access is probably prime in every business owners mind now.
I am also glad that the index validated what everyone probably knows that Customer Service and taking care of employees are strong points of small business. Love America – Patronize a Small Business !
Social media Swami
What I get out of this is: business owners themselves aren’t feeling the squeeze as badly as expected. But since the news reports are so negative, people assume that other businesses have been affected much worse than themselves. Judging by the news outlets, many small businesses are holding on by a thread. I guess we shouldn’t believe everything we hear afterall.
What I get out of this is…
…media senualizes formation and events to get attention and keep attention in order to keep people watching. They use frequency and time allocation to do this.
…and they do it because the public wants it, tolerates it. They vote by watching it. What does this say about the people who watch it? What does this say about our society?
Let’s say if a magazine no longer has subscribers, the magazines folds.
Same as a business.
No buyers, no business.
Again back to the questions I asked a few paragraphs above.
Maybe we’re all just cautiously optimistic industry insiders, as in Mark’s cartoon today. 🙂
Hope this isn’t off-topic — I found something strange about one of the remarks President Obama made announcing support programs for small businesses. Here’s what I thought & wrote about it: http://online.amplify.com/2009/03/17/president-obama-does-success-for-a-small-business-mean-to-become-a-big-business/
I wonder if the study takes into consideration the size of the business as a determiner of whether the owner feels hard hit or not. I’ve had a personal belief that the small business owner working out of his house with no employees is hurt less in the current environment than a small business owner with a lease and employees to pay every month. The really small, early stage entrepreneur runs so lean that it is easier for him to survive the carnage (or so my theory goes). Perhaps a large percentage of the respondents to this survey are small, one man enterprises.
I listened to one of the top managers at IKEA today. It is fascinating to hear about the business story, built on frugality and a special type of attitude. IKEA is nowadays is a huge group of companies, but it started with Ingvar Kamprad selling small stuff through direct selling and mail order.
The company is very optimistic about the future.
For the past several years, the most important contribution in a business is a good leader who runs it. These been the key why small businesses still on its stand for success, the leaders. According to the survey, they conducted this, to give more knowledge on how more success would come.
It is a great idea on the other side, that Network Solutions plan for the future of small businesses. They may consider that business is a learning experience for all the leaders.
I find it interesting that small business owners feel they are ‘doing better’ than their competition. It could be that the survey respondents are more likely to be actively trying to do something different than their competition? The relevance for me is that small business is not as complacent as big business (and I’ve worked for, and in, both) and are more focused on what they need to do to move forward (and past competitors). Admittedly, these forward decisions might not be the best decisions, but they are better than standing still.
How can the stimulus plan or the money get to those who really need help in their business like me. How can it be pay back and what is the interest. How can i apply for it?