Is there anyone better than entrepreneurs at taking lemons and transforming them into lemonade? I think it’s one our best qualities. These last few years spent fighting The Great Recession have certainly given us plenty of lemons to work with. The results of several recent surveys indicate just how resilient we small business owners are. I share these with you because I’m a big believer that surveys serve many purposes, not the least of which are as useful benchmarking tools.
First, the lemons. Those small business owners surveyed in the Small Business Success Index (PDF), a semi-annual study released last month by Network Solutions and the University of Maryland’s Robert H. Smith School of Business, reported that doing business in The Great Recession has resulted in the following:
- 52 percent of small businesses have discounted their products
- 43 percent have experience lowered staff morale
- 42 percent have accepted a lower standard of living for themselves
- 35 percent have been forced to cut salaries
- 29 percent have been forced to reduce employee benefits
According to the U.S. Small Business Outlook 2010, a survey of small business owners conducted by Forbes Insights and financial services provider CIT, 59 percent of those surveyed said their revenues declined in 2009 with 26 percent reporting “significant” decreases. Nearly two-thirds (64 percent) claimed the recession made cash flow harder to manage. Their top challenges in 2009 were lower revenues; slow-paying or non-paying customers; increased business expenses; and longer sales cycles.
This all sounds pretty gloomy. But–and here comes the lemonade–most business owners reported they actually learned important lessons from the economic downturn. Of the group surveyed in the “Small Business Outlook,” 80 percent said the recession made them “smarter about running their businesses” and 70 percent said tackling the challenges made them “better leaders.” Both groups surveyed took the following constructive actions:
- 72 percent found more effective ways to operate (Small Business Success Index, SBSI)
- 71 percent worked harder and longer (Small Business Outlook, SBO)
- 64 percent ran their business more aggressively (SBO)
- 63 percent reduced overhead and expenses (SBO)
- 47 percent developed new revenue streams (SBSI); 46 percent according to SBO
- 31 percent reduced inefficiencies and staff (SBSI)
The entrepreneurs surveyed in the SBSI said they realized they needed to “differentiate” themselves from their competitors. Here are the ways they plan to do that:
- 78 percent will provide “superior customer service”
- 76 percent will offer higher quality products and services
- 65 percent will address customer needs with new ideas
- 44 percent will lower prices
Both groups plan to focus on marketing. Nearly two-thirds (62 percent) of those surveyed in the SBO reported they were going to invest more in marketing and advertising. According to the SBSI, many entrepreneurs felt they were at a disadvantage when it came to marketing. Surprisingly, print advertising was the most cited method of marketing (37 percent), followed by e-mail marketing (24 percent), and social media. While 24 percent of the business owners reported having some kind of social media presence (double the number from last July’s Index), just 20 percent of them said they actively use social media.
Here is how respondents plan to ramp up their marketing efforts:
- 75 percent will build a company page on a social networking site
- 69 will post articles on social media sites
- 57 percent will build a network on sites like LinkedIn.com
- 54 percent will monitor feedback about their business online
- 39 percent will write a blog
- 26 percent will Tweet about their areas of expertise on Twitter
- 16 percent will use Twitter as a “service channel”
What about the future? Well, it seems like most business owners could break out into a chorus of “The Sun Will Come Out Tomorrow.” The most optimistic were those surveyed in the SBO: 47 percent predicted the recession will end this year, while 21 percent believed it was already over. Meanwhile, 36 percent of SBSI respondents believe that 2010 is the year it all gets better. And in yet another survey, the American Express OPEN “Economic Pulse,” 43 percent of small business owners surveyed said they expect the economy to improve within 12 to 18 months.
What do you think? Are you feeling positive about 2010?
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