Entrepreneurial

Exclusive: Survey says small businesses upbeat about 2011

November 11, 2010

Small businesses are feeling better about the economy and are looking to grow in 2011, according to a new survey released this week by online marketing firm Constant Contact.

Of the more than 1,400 small business owners that responded to the survey (view full results), 73 percent expected their companies to grow over the next 12 months and nearly 40 percent felt “positive” about the economy over the course of the next year.

“They see the darkness behind them and looking forward they see some light,” said Eric Groves, Constant Contact’s senior vice president of global market development. He added the survey is a “followup” to the Waltham, Massachusetts-based company’s larger spring polling of roughly 4,000 small businesses. Groves said Constant Contact has more than 400,000 clients, predominantly small to medium-sized businesses.

Another key finding was that small businesses remained disenchanted with the Obama administration’s efforts to help, with a combined 51 percent of respondents rating the federal government’s attitude toward small businesses as “very unsupportive” (28.7 percent) or “moderately unsupportive” (22.6 percent).

“They’re looking at this as something they’re going to have to figure out themselves,” said Groves on the challenge respondents face in growing their businesses in a slow economy.

More than 70 percent of small businesses said they had not sought financing in the last 12 months. Of those that did secure financing, just 12 percent said they obtained a loan from the U.S. Small Business Administration – the prime government lending arm to small firms. In order, the most popular targets for funding were: banks (50 percent), family and friends (23 percent), angel or venture investors (13 percent) and Community Development Financing Institutions (CDFIs) at a mere 2 percent.

While 55 percent said they expected to enjoy moderate growth, just 35 percent said they would be hiring over the next year.

“They’re cautiously optimistic is the best way to put it,” said Groves, adding more than 50 percent of the companies polled were looking to reduce operating costs and in lieu of hiring, many were looking to drive new business through investing in sales and marketing. A key component of that involved using social media, namely Facebook, which was selected by 63 percent as an “important” marketing tool.

“One of the biggest changes we’ve seen from the spring to the fall (surveys) is the presence of social media in their minds,” said Groves, adding the Facebook response was up from 50 percent in the spring. “Small business owners have so little time to spend on new things that they hope will build their businesses and social media is one of those things right now.”

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