As the year draws to a close, it’s time for small business owners to take stock of what they can expect in 2013 – and most of them are expecting something good, according to the Fall 2012 Bank of America Small Business Owner Report.
The semi-annual survey found more than half of small business owners expect their revenues to grow in the next year, with just 7 percent expecting sales to drop. Nearly one-third plan to hire employees in 2013, while 56 percent will maintain the status quo, and just 3 percent foresee having to downsize.
Despite these optimistic projections, small business owners do have some major concerns heading into the new year. Not surprisingly, the top five concerns (all cited by between 63 and 68 percent of respondents) were:
- the effectiveness of government leaders
- rising commodities prices
- healthcare costs
- the recovery of consumer spending
- the strength of the dollar
One reason small business owners may be so optimistic despite these concerns is their local focus. Nearly two-thirds (63 percent) say their customers primarily come from the local community. Just 27 percent say that most of their customers come from outside the community (but still in the U.S.), and only 3 percent primarily focus on customers outside the U.S.
As a result, 75 percent report the local economy plays a significant role in their businesses; for 59 percent the national economy does holds the most sway, and 28 percent say the global economy is the most important. Small business owners were also more optimistic about their local economies improving in the coming year than about the national economy doing so.
Small business owners’ local focus also came through loud and clear when asked about marketing. For 87 percent, “word of mouth” is the most effective marketing tactic; just 32 percent cite social media.
In general, traditional marketing was more effective for the small business owners than digital marketing. Networking with other business owners (49 percent), advertising (41 percent) and direct mail (37 percent) were their other top tactics. (I wonder, though, if this is because they aren’t sure how to use digital marketing effectively, and whether – if they truly tried it – it would end up surpassing those more traditional methods.)
You might be surprised by the positive view small businesses in the study took regarding big business. Fewer than one in five (17 percent) thought of big businesses as their competition. In contrast, nearly four out of five (79 percent) have big businesses as customers.
Finally, despite the popular belief, small business owners aren’t going begging for capital. Au contraire, 70 percent have access to all the capital they need to run their businesses, and just 16 percent plan to apply for a loan next year.
How does your business compare to what these small business owners are feeling? Are you equally optimistic? Why or why not?
For more details, download the Fall 2012 Bank of America Small Business Owner Report.
Local Shopping Photo via Shutterstock
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We run a business as small business advisors and definitely sense this optimism. Thank goodness, too!
Luckily there are still advantages to being local. I just wish more people took advantage of them.
Great post, Rieva. I think local is the way to go. I love shopping at my local farmer’s market. Not only does it help local business, I think it’s also much better quality – depending on what you’re buying locally. Thanks for sharing this with our community.
I started my small business this year and my clients are all local small businesses. I sense optimism too, but still concern over the dysfunction in Washington. Great post, thanks!
Local is definitely what is working for my company right now . I think it’s a win, win for all. Thanks for the great share.