How do Entrepreneurs Feel About Their Small Businesses in 2012?

HOW DO ENTREPRENEURS FEEL ABOUT THEIR SMALL BUSINESSES IN 2012? With 2011 in the books, small business owners have begun looking ahead. There are products to be launched, sales to be made, and contracts to be won; the only question is how many and how often. The results of a recent study reveal how these owners are planning to steer their companies through 2012. OVERALL BUSINESS PERFORMANCE The beginning of every new year brings with it the excitement of what's in store for the coming 12 months. For business owners, many are thinking about their potential performance. LEVEL OF OPTIMISM (Percent of Respondents) Surprisingly, MORE THAN 1/2 7% 32% of small business owners feel either neutral or pessimistic about their performance potential in the upcoming year. Very Pessimistic Optimistic 8% Perhaps in spite of their performance outlooks, the majority of small business owners cite "customer or client acquisition" as the number one area they aim to improve next year. Very Optimistic 21% -32% Pessimistic Neutral/Don't Know IMPROVEMENT AREA (Percent of Respondents) 60% Customer or client growth 13% Local competition 38% Customer or client retention 11% Internal employee retention 21% Product or service expansion 11% Internal employee growth 21% Budget constraints 9% Geographic expansion 21% Communications/Marketing/PR 6% other 15% Technology innovations HOW SMALL BUSINESSES WILL INVEST INTERNALLY More than half of small business owners do not plan to diversify or narrow the scope of their business in 2012. Instead, the majority of their investments will be made internally, growing departments such as marketing and sales. DEPARTMENT/RESOURCE (Percent of Respondents) 35% 28% 22% 20% 19% 13% Marketing Product/Service Expansion Sales Technology/IT None, Will Not Invest Education 11% 11% 11% 9% 8% 6% 5% 4% Office Space Capital Improvements Staffing Communications Product Research Physical Infrastructure Other Land and Development EMPLOYEE GROWTH IN THE NEW YEAR NEARLY 2/3 4% 19% 44% 13% 50% of small businesses say they do not plan to hire more employees in 2012 than they did in 2011. 51 - 100 6- 10 1-5 11 - 25 40% 6% 14% 30% But that doesn't mean they aren't hiring. The majority of these businesses plan to add 1-5 employees to their workforce in the coming year. Over 100 26 - 40 20% 10% NUMBER OF NEW HIRES (Percent of Respondents) HOW SMALL BUSINESSES WILL ATTRACT NEW CUSTOMERS Despite the growing world of social media and the importance many small businesses place on it, about half of all owners claim that repeat business and word-of-mouth will be the primary way that they attract new customers next year. ACQUISITION CHANNEL (Percent of Respondents) 25% 25% 22% 13% 11% 4% Word-of-Mouth Repeat Business Advertising and Marketing Networking Social Media Other SOURCE: ZOOMERANG spark TM by marketo