Minneapolis (PRESS RELEASE – June 27, 2011) – Small business owners nationwide say the economy is starting to improve, but many feel the recession is still lingering. These and more views of nearly 3,000 small business owners are featured in the 2011 U.S. Bank Small Business Annual Survey.
- small business owners are seeing some signs of improvement, but remain cautious about the future (only 26% report higher sales this year);
- economic uncertainty is their biggest concern;
- the job outlook is stabilizing and
- social networking is gaining influence, e-mail is king.
“We are heartened to see the outlook improving, but there is still work to do. Small business owners are starting to see the recessionary clouds part, but for many the recession remains,” said Rick Hartnack, vice chairman and head of consumer and small business banking at U.S. Bank. “At U.S. Bank, we increased small business lending in 2010. For example, our branches increased small business loans outstanding by over 22 percent year-over-year. We hired an additional 150 small business specialists in key markets and we’re still hiring today. This survey is one of the many tools we are using to listen to small business owners, understand their needs and understand how we can help them grow and prosper. Things are starting to improve, and for the thousands of small businesses that will help our economy grow, and we are ready to support them.”
Fewer small business owners think the U.S. economy is currently in a recession. In 2010, 89 percent of small business owners believed the economy was in recession. In 2011, that number dropped to 78 percent, but still remains high. More view their state’s economic condition as weaker than the U.S. economy overall.
More small business owners (64 percent) report revenue in line with or higher than last year, as opposed to 2010 when only 55 percent said revenue was as good or better than the previous 12 months. Only 10 percent of business owners expect revenue to be lower next year. Most (70 percent) expect to keep staffing levels intact over the next 12 months, 22 percent say they plan to hire.
Economic uncertainty is the single biggest challenge. When asked about the most significant challenge facing their business today, 27 percent said economic uncertainty. “Poor sales” was the second most common reason (16 percent), followed by federal regulations (12 percent), competition (9 percent) and taxes (8 percent). What may be a reflection of their uncertainty about the economy, only 20 percent said they borrowed or tried to borrow money during the last six months.
Social networking gained prominence in 2011. Those who said they used social networking for recruiting or business development ticked up seven points to 39 percent in 2011. Most used were Facebook (74 percent), LinkedIn (57 percent), followed by industry communities (26 percent) and Twitter (23 percent). The technologies they cannot do without: E-mail/computer (69 percent), mobile phone (64 percent) and landline phone (51 percent). Interestingly, 31 percent say they cannot live without their fax.
Time is of the essence to small business owners and giving back to the community is a priority. A majority (66 percent) say they are almost always on the go and small business owners are split on whether they feel they have enough time for family and friends. Less than half (48 percent) expect to take less than two weeks of vacation this year. A majority (58 percent) think giving back to the community is important. All of the work/life measures for 2011 were consistent with 2010 results.
Perceptions of banking are improving as banks increase their focus on small business. The number of small business owners who viewed their banks as helpful to their business in the past year jumped seven points to 43 percent, as did the number who say their bank provides them with everything they need (up 10 points to 32 percent). Similar to last year’s results, small business owners would like more personalization (adjust to meet my individual needs, know me and my business) and consultation (serve as a business partner or financial mentor) from their bank than they are experiencing today.
The survey produced national results, as well as a deeper look at small business owners in Arizona, Northern California, Southern California, Colorado, Illinois, Minnesota, Missouri, Ohio, Oregon, Washington and Wisconsin. Researchers heard from 2,923 owners of businesses with $10 million or less in annual revenue between April and May of 2011.
About U.S. Bank
U.S. Bancorp (NYSE: USB), with $311 billion in assets as of March 31, 2011, is the parent company of U.S. Bank, the fifth largest commercial bank in the United States. The company operates 3,082 banking offices in 25 states and 5,238 ATMs and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions. U.S. Bancorp and its employees are dedicated to improving the communities they serve, for which the company earned the 2011 Spirit of America Award, the highest honor bestowed on a company by United Way.More in: Small Business Growth