The FINANCIAL — Entrepreneurs are making slow but steady progress towards growth, according to the Fall 2013 American Express OPEN Small Business Monitor. The research suggests business owners have abandoned their “wait and see” approach and a third (32%) of entrepreneurs are making growth a top priority, according to American Express Company.
Furthermore, more small business owners are making capital investments (54%, up from 49%) and hiring plans are up (35%, up from 29%) year-over-year. Entrepreneurs are in a better position to increase investments as cash flow has become less of a concern (52% reported a cash flow crunch, down from 59% six months ago).
Concerning the state of the economy, fewer business owners believe the economy is in recession (25%, down from 30% this spring and 36% last fall), paving the way for increased optimism. When asked about their outlook over the next six months, more than half (56%) have a positive outlook on business prospects and more than four-in-ten business owners (43%) are confident that their revenues will increase. Currently, nearly four-in-ten (38%, up from 27%) say their revenues are greater than they were a year ago and 16% say they have more employees than they did last year (vs. 8% in fall 2012), according to American Express Company.
“Small business owners appear poised to flip the switch to growth mode,” said Susan Sobbott, president, American Express OPEN. “Business owners are getting more targeted in their approach to building customer demand and an increasing number are using analytics to better understand their customers and social media to drive sales,” Sobbott added.
Social media has become an extremely large part of a company's overall online marketing process, according to the report. It helps companies reveal the individuals behind the brand, humanize it and build influence, and it’s essential in order to ensure continued business success.
While only half (50%) of entrepreneurs surveyed use social media, those that employ it have developed a more targeted approach:
71% use social media to attract new customers (up from 57% last fall)
59% use it to drive sales (up from 46% last fall)
55% use it to create a dialogue with customers (up from 31% last fall)
36% use it to create communities where customers can talk to each other (up from 25% last fall)
As entrepreneurs look to expand their businesses, more than half (52%, up from 48% last fall and 44% six months ago) say increased customer demand would most help them to grow.
The demands on most entrepreneurs make it tough to develop a work-life balance. However, it appears that their quality of life is improving. Fewer entrepreneurs find it stressful to balance their personal life and their business (59%, down from 64% in spring 2007). A smaller number of business owners are taking their health for granted (57%, down from 71% in spring 2008). On average, business owners are working a half an hour less per day than they were in the fall of 2010 (10.5 hours vs. 11 hours), the report says.
More than half of business owners pay themselves a salary (51%, on par with 48% last fall), but on average they are earning less $68,300 compared to $72,000 last fall. For women entrepreneurs, the opposite is true. Women’s salaries actually went up to $63,000 from $60,000 a year ago.
Roughly one in ten business owners (14%) need to work a second job while running their business in order to make ends meet. Women business owners are more likely to have to work a second job than their male counterparts (19% vs. 11% of men), according to American Express Company.
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