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Small Business Barometer Topline Results 2010 Preview

April 29, 2010

Both nationally and in Capital One’s major markets, small businesses believe the economic conditions for their business are staying the same:

Nationally, almost half (47%) of small business owners report that they think economic conditions are currently staying the same. Twenty-six percent think conditions are improving while 27% believe they are getting worse.
In Louisiana, most small business owners (47%) believe economic conditions for their business are staying the same. Twenty-three percent think conditions are improving and 29% percent feel conditions are getting worse.
In New Jersey, most small business owners (40%) believe economic conditions for their business are staying the same. Twenty-nine percent believe conditions are improving while 30% feel conditions are getting worse.
In New York, most small business owners (47%) believe economic conditions for their business are staying the same. Twenty-seven percent believe economic conditions are improving while a quarter of SBOs believe conditions are getting worse.
In Texas, most small business owners (45%) believe economic conditions for their business are staying the same. Thirty-three percent believe economic conditions are improving while 22% percent feel conditions are getting worse.

Compared with one year ago, both nationally and in Capital One’s major markets small businesses report that their financial position has either remained about the same or has gotten worse:

Nationally, 39% of small businesses report that their firm’s financial position has stayed about the same as one year ago. Thirty-one percent say it has gotten worse while only 28% report it has gotten better.
In Louisiana, 35% of small businesses report that their firm’s financial position has stayed about the same compared to one year ago. Thirty-six percent report that is has gotten worse and 26% say it has gotten better.
In New Jersey, 40% of small businesses report that their firm’s financial position has stayed about the same compared to one year ago. Thirty-four percent say their financial position has gotten worse while 24% report it has gotten better.
In New York, 39% of small businesses report that their firm’s financial position has stayed about the same compared to one year ago. Thirty-five percent report that their position has gotten worse while 26% report it has gotten better.
In Texas, 38% of small businesses report that their firm’s financial position has stayed about the same compared to one year ago. Thirty-one percent say it has gotten worse and 28% report it has gotten better.

The large majority of small businesses, both nationally and in Capital One’s markets, plan to keep spending on business development or investments the same in the next six months:

Nationally, 58% of small businesses plan to keep their spending on business development or investments at the same level in the next six months.
In Louisiana, 52% of small businesses plan to keep their spending on business development or investments at the same level in the next six months.
In New Jersey, 52% of small businesses plan to keep their spending on business development or investments at the same level in the next six months.
In New York, 56% of small businesses plan to keep their spending on business development or investments at the same level in the next six months.
In Texas, 60% of small businesses plan to keep their spending on business development or investments at the same level in the next six months.

Nationally, an overwhelming majority of small businesses report they are currently able to access the credit or financing they need.

Nationally, 74% of small businesses say they are currently able to access the credit or financing they need. Only 18% report that they can’t.
In Louisiana, 76% of small businesses say they are currently able to access the credit or financing they need. Only 16% report that they can’t.
In New Jersey, 68% of small businesses say they are currently able to access the credit or financing they need. Only 21% report that they can’t.
In New York, 71% of small businesses say they are currently able to access the credit or financing they need. Only 21% report that they can’t.
In Texas, 81% of small businesses say they are currently able to access the credit or financing they need. Only 13% report that they can’t.

Hiring trends will continue to remain stagnant for the next six months among small businesses nationally.

Nationally, 64% of small businesses said they do not plan on hiring additional employees in the next six months, while 29% did have plans to bring on additional talent.
Nationally, only 1% of small businesses plan to lay employees off in the next six months.
In Louisiana, 61% of small businesses do not plan on hiring additional employees in the next six months, while 31% did say they plan on hiring additional personnel.
In New Jersey, 69% of small businesses do not plan on hiring additional employees in the next six months, while a quarter (25%) did say they plan on hiring additional personnel.
In New York, 66% of small businesses do not plan on hiring additional employees in the next six months, while 25% did say they plan on hiring additional personnel.
In Texas, 63% of small businesses do not plan on hiring additional employees in the next six months, while 30% did say they plan on hiring additional personnel.

Both nationally and in Capital One’s banking markets, most small businesses rely on banking relationships or a financial advisor for their company’s financial advice:

Nationally, 42 percent of small businesses report that they get financial advice from banking relationships/bank websites and 42 percent use financial advisors, up from 34 percent in Q3.
In Louisiana, most small business owners get financial advice from banking relationships/bank websites (42%) or a financial advisor (39%).
In New Jersey, most small business owners get financial advice from banking relationships/bank websites (41%) or a financial advisor (39%).
In New York, most small business owners get financial advice from banking relationships/bank websites (45%), up 10 percentage points from third quarter, or a financial advisor (38%).
In Texas, most small business owners get financial advice from banking relationships/bank websites (46%) or a financial advisor (37%).
Other popular sources of financial advice are industry associations, other business owners/Chamber of Commerce and friends and family.

Most small businesses do not see the value in using social marketing tools to promote their business:

Nationally, most small businesses (62%) see no value in using Facebook to promote their business. Nearly three-quarters of small businesses nationally see no value in MySpace (70%), Twitter (73%) or blogs (72%) to promote their business.

About half of small businesses plan to made additional investments during the next 6 months:

Nationally, 54 percent of small businesses plan to make some kind of investment in the next 6 months. Most (35%) reported that they plan to invest in marketing, while 12 percent plan to invest in management, 17 percent in IT and 15 percent in financial aspects of their business.
In Louisiana, more businesses have decided to invest this quarter, with 58 percent of small businesses reporting that they will make investments in the next 6 months, compared to 51 percent in the third quarter. A growing number of small businesses are planning to invest in marketing; over one-third (35%) reported planned investments in this area, an increase of 12 percentage points from third quarter.
In New Jersey, investments are on the decline, with just over half of small businesses (51%) this quarter planning to make investments in the next 6 months, down from 63 percent in the third quarter. For those small businesses that are planning to invest, most (30%) will put money into marketing.
In New York, 52 percent of small businesses say that they do not plan to make any investments in the next 6 months. This represents an increase from 45 percent last quarter. Twenty-nine percent reported that they plan to invest in marketing and 16 percent in IT.
In Texas, almost half (47%) of small businesses say that they do not plan to make any investments in the next 6 months, nearly the same as last quarter (48%). However, 32 percent said they plan to invest in marketing, 16 percent plan to invest in IT and 11 percent reported plans to invest in financial aspects of their business.

Small businesses report that, looking ahead for the next 6 months, their greatest concern is their ability to acquire new customers:

Nationally, 58 percent of small businesses report that the ability to acquire new customers is one of their greatest challenges in the next 6 months. Other concerns include the ability to maintain existing customers (37%), identifying new revenue streams (25%) and securing capital needed to continue operations (18%). These results are consistent with last quarter.
In Louisiana, 52 percent of small businesses see the ability to acquire new customers as one of the biggest challenges to their business in the next 6 months. Other challenges they will face are the ability to maintain existing customers (27%) and identifying new revenue streams (22%), which grew as a concern since the third quarter (14%).
In New Jersey, 53 percent of small businesses see the ability to acquire new customers as one of their biggest challenges in the next 6 months, a decrease from 65 percent in the third quarter. Other challenges they foresee are the ability to maintain existing customers (28%) and identifying new revenue streams (24%). However, New Jersey small business owners are less concerned with securing the capital needed to continue operations this quarter (17% in the fourth quarter compared to 29% in the third quarter).
In New York, 59 percent of small businesses foresee the ability to acquire new customers as one of their biggest challenges in the next 6 months. Other challenges they will face are the ability to maintain existing customers (26%) and identify new revenue streams (16%). Between the third and fourth quarters, employee retention moved down the list of challenges (17% cited this concern in third quarter compared to 8% in the fourth quarter).
In Texas, 57 percent of small businesses see the ability to acquire new customers as one of the biggest challenges to their business in the next 6 months. Other challenges they foresee are the ability to maintain existing customers (32%) and identifying new revenue streams (18%).

Survey Methodology
The findings reported in this release are from a telephone survey conducted by the opinion research firm, Braun Research of Princeton NJ. Braun Research interviewed a nationally-representative sample of 1,611 for-profit small businesses in the U.S., weighted to Dunn and Bradstreet counts of all businesses nationwide by employee size and geography. Samples were also taken in New York, New Jersey, Louisiana and Texas. Small businesses are defined as those with less than $10 million in annual revenue. The interviews were conducted between December 28, 2009 and January 13, 2010. All interviews were conducted by telephone at their places of business. One respondent per business was conducted. The margin of error is ± 4.38 percentage points at the 95% confidence level. Interviews were monitored at random. Sampling for this study was conducted using a national sample of businesses drawn from InfoUSA. All interviews were conducted using a computer assisted telephone interviewing system. Statistical weights were designed from the United States Department of Commerce to ensure proper inclusion of all SIC codes.

Category: Economy: Nation, Global, Entrepreneurship, Marketing, Branding, Advertising, Small Business Surveys

Small Business Barometer Topline Results 2010 Preview

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