The State of Small Business in 2016
It’s no longer big business that serves as the measuring stick for the state of the economy, job opportunities, and the outlook on future growth. The fabric of this country is really being held together by small businesses that single-handedly brought the country back after the last recession. This “little engine that could” is becoming the fast track to greater economic stability.
With that as the backdrop, Wasp Barcode recently released its annual survey on the State of Small Business, which includes a survey of 1,100 small businesses from across the country. These businesses represent a diverse number of business segments, such as agriculture, banking, construction, education, energy, healthcare, hospitality, IT, professional services, repair services, retail, and warehouse and logistics. This provided a much wider perspective about what was on the minds of these small business owners in terms of the external and internal factors that are impacting on their bottom line.
With the upcoming presidential election and growing involvement of government through regulation, Wasp Barcode added some specific questions about these influences. One in ten small businesses do not want the government involved at all. Although larger companies are more comfortable with government involvement, 37% believe government does not do enough for them while 14% of smaller businesses would prefer no government involvement.
When asked how the 2016 presidential election will impact their business, 39% felt that a Republican win would provide a positive impact while the same percent felt that it would provide no impact while 22% said it would yield a negative impact. If it was a Democratic win, 34% said it would be a positive impact, 36% no impact, and 30% a negative impact. Overall, small business owners appear to be hoping that it’s a Republican win.
In looking at the potential for economic growth, small business owners see certain challenges facing their operations this year. From greatest challenge to least, these include hiring new employees, increasing profitability, funding employee healthcare, growing revenue and improving cash flow. Compared to 2015’s challenges, small business owners see hiring new employees and providing employee healthcare as bigger this year than last.
Confidence in the economy does appear to be on the upswing with small business owners. Sixteen percent think it’s significantly better while 28% say it’s slightly better. Still, a third of those surveyed feel that there has been no change. Those appearing to be the most pessimistic about the economy are companies that have between five and fifty employees perhaps due to issues like Obamacare.
In looking at their own revenue during 2016, 37% expect to see more than a five percent increase in revenue while 32% expect a modest revenue growth of between one and four percent. Overall, 71% of all small businesses expect some type of revenue increase in 2016.
A large percentage of small businesses (62%) noted that they have invested four percent or more of their revenue in online and traditional marketing tools and platforms, including word-of-mouth marketing, Internet advertising, e-mail, social media, website and direct mail. They are also still using traditional marketing methods like TV, radio, and/or print ads as well as print collateral and trade shows and/or conferences. They are also spending money on outsourcing marketing, advertising, design, and public relations. The areas with the smallest investment include video, blogging, and SEO.
Small businesses recognize the value of investing in marketing as well as information technology, but appear to be proceeding with caution in this election year. While there is a wait-and-see attitude among many small business owners, the overall perspective appears to be positive due, in part, to the fact that most have improved their positions over 2015 even in the face of key challenges that remain on their minds.
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