New York (PRESS RELEASE – May 8, 2011) – In a sign that small businesses are finally emerging from the recession and looking to grow, an increasing number of business owners are adopting social media as a way to better market their business and reach more customers, according to the latest Citibank small business survey. The increased use of social media represents one of several findings in Citibank’s survey that shows small businesses are taking concrete action to grow in 2011.
According to the survey, use of social media increased significantly over the last year, with 36 percent of small business owners saying they use social networking sites such as Facebook, Twitter or LinkedIn to market their business, compared to just 19 percent a year ago.
Additionally, when asked what steps they will take to attract more business in 2011, 68 percent of small business owners say they will increase marketing and 54 percent say they will offer new products and services. Of those who plan to do business in a larger geographic area this year (38 percent), 49 percent plan regional expansion, 18 percent plan national expansion, and 16 percent are looking toward international expansion.
“As one of the main drivers of job creation and economic growth in the United States, small businesses are crucial to a robust and sustained recovery,” said Raj Seshadri, the head of Small Business Banking at Citibank. “We are thrilled to find that many small businesses believe the time is right to expand their business and find new customers, and at Citibank, we are committed to helping them succeed and grow.”
Business Conditions, Outlook Stabilizing
Though a majority (68 percent) continues to rate current business conditions as fair or poor, Citibank’s survey shows that small business owners clearly believe the worst is over, with 53 percent describing 2011 conditions as “steady as a rock.” Sixty-nine percent say their business is better or about the same as a year ago, compared to 31 percent who say it is worse. Looking at the rest of 2011, 81 percent expect the year to be better or about the same as 2010, with 19 percent expecting it will be worse.
Among the surveys other key findings:
- 76 percent say they would start their business again even if they knew then what they know now about the challenges they would face;
- 66 percent of respondents are likely or very likely to use a website to expand their business in 2011;
- 58 percent say they will work longer hours themselves to grow their business;
- 55 percent say the biggest benefit of owning a business is being your own boss.
Hiring Plans Improve
Though still tepid, the number of small businesses that plan to increase their workforce in the next 12 months improved in Citibank’s latest survey, increasing to 19 percent in April from 14 percent in January. Seventy-four percent plan to keep the same number of employees, down from 78 percent in January, while 7 percent plan to reduce jobs, which is flat compared to earlier in the year.
When asked about wages, the majority of respondents say the compensation they pay their employees has remained the same in the past year, compared to 28 percent who have increased wages and 12 percent who cut pay. Fifty-one percent say they provide healthcare to their workforce, compared to 49 percent who say they do not.
Taxes, Healthcare, Energy Costs Pose Biggest Challenges
Of course, small businesses face many unknowns and challenges. Eighty-three percent of respondents say they are concerned about another economic downturn, while 77 percent say they are prepared should one occur.
When asked what would have the most negative impact on their business this year, small business owners say the increased cost of gas and energy (33 percent), the rising costs of raw materials (18 percent), and inflation (15 percent). Respondents cite reducing taxes (37 percent) and lowering the costs of healthcare (19 percent) as the most important issues to address if advising policy makers.
Overall the survey’s results show clear signs of an improving outlook among the nation’s small businesses, said Seshadri. “We are very encouraged by these findings, which show small business owners are out of survival mode and moving into growth mode,” Seshadri said. “The increased hiring and growth plans of many small business owners represent incredibly positive developments for our communities and our economy.”
About the Survey
This Citibank poll was conducted via telephone by Abt SRBI from April 8 to April 21, 2011, among a national random sample of 1,004 small businesses in the United States, with revenue over $100,000 and no more than 100 employees. The margin of error is approximately +/- 3.1% percentage points at 95% confidence. Surveys are subject to other error sources as well, including sampling coverage error, recording error, and respondent error.
Citibank is a member of Citi, the leading global financial services company, which has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Through Citicorp and Citi Holdings, Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.