The health of small business is improving in 2012, according to new survey data from Constant Contact(R), Inc., with the majority of small businesses reporting revenue increases over 2011. When asked how their organizations have done so far this year:
- 59 percent said revenues increased.
- 30 percent said revenues remained flat.
- 11 percent said revenues decreased.
The continued outlook is positive, with 79 percent of small business owners expecting revenues to increase over their 2011 revenues. When asked what their revenue expectations are this year compared to last year:
- 52 percent expected their revenues to increase more than 10 percent.
- 27 percent expected their revenues to increase less than 10 percent.
- 13 percent expected their revenues to remain flat.
- 4 percent expected their revenues to decrease less than 10 percent; 3 percent expected their revenues to decrease more than 10 percent.
Rising costs remain a challenge, with 45 percent of small businesses reporting their operating costs have increased. Further, a full 30 percent report their cash flow is inadequate and preventing them from growing their business. Of the 19 percent of small businesses that have sought funding this year, only 16 percent received some or all of the funding they needed.
Though the revenue outlook is brightening, challenges remain for small businesses, primarily how to achieve growth. When asked about what keeps them up at night:
- 76 percent said how to attract new customers.
- 49 percent said how to connect with, and better engage with, existing customers.
- 41 percent said how to get referrals from current customers.
While attracting and engaging customers is a top concern, marketing spend has stayed steady for most of the small businesses surveyed. Sixty percent report keeping their marketing budget the same as 2011, and only 29 percent have increased their budget. When asked which marketing activities they find to be effective for their organization today:
- 83 percent chose email marketing.
- 71 percent chose website marketing.
- 68 percent chose in-person interactions.
- 49 percent chose social media marketing.
The majority (53 percent) of small business owners ranked social media as the marketing channel they need the most help with, indicating that social media could play a more prominent marketing role if they were more confident in their social media skills. Among social media tools, Facebook(R) still rules the day. When respondents active in social media were asked which tool was most effective:
- 75 percent chose Facebook.
- 10 percent chose LinkedIn(R).
- 7 percent chose Twitter(TM).
- Pinterest(R), Google+(R), YouTube(R), and Yelp(R) all came in between 1 to 3 percent.
Increased revenue has not yet translated into hiring, however. Some 66 percent of small businesses are not planning to hire additional full-time employees in the next six months. Almost 20 percent said they need to hire more employees but can’t.
The survey was administered in May 2012 to 1,000 participants in the Constant Contact Small Biz Council, a research panel of US small businesses and nonprofits recruited from the Constant Contact customer base. This is the first installment of an ongoing study about the state of small businesses and the ways they connect with, and grow, their audiences. Results include responses from 728 respondents across a range of business-to-business and business-to-consumer industries.