Small Biz Worried About Success
Updated: While most small business owners are optimistic about their growth, they have legitimate concerns about managing expansion.
“Big growth, big problems,” small businesses are saying, with more than three-quarters of survey participants expressing concerns about managing a burgeoning business. Of the 2,400 owners of U.S. industrial small businesses – including distributors, manufacturers, service companies and their suppliers – that were surveyed during Spring 2003 by Thomas Regional, 78 percent are optimistic about growing over the next 12 months, but they are seriously concerned about effectively managing their expansion.
More than half (53 percent) of the respondents expected to increase their workforce, and In-Stat/MDR estimates that nearly 38 million jobs will be provided by the roughly 2.4 million small businesses that will be in operation by the end of 2003.
Besides staffing, Thomas Regional found that 51 percent of the small business owners that were interviewed expected to buy additional equipment, and more than one-quarter (26 percent) thought they would outgrow their space and have to move to a larger facility.
Nearly half (45 percent) of the respondents consider expansion into new geographic markets as being instrumental in their growth. “The Internet allows industrial small businesses to expand and sell into new markets well beyond their geographical borders,” said Eileen Markowitz, president of Thomas Regional Directory Company.
While 49 percent of respondents indicated that they did not have a Web site, 42 percent said that site development was imminent. More than one-third (36 percent) plan to initiate an online sales operation, however, 38 percent indicated that they need help selling their products/services over the Internet, and 55 percent wanted to know how to set up a Web site.
One-third (33 percent) of the companies without a Web site didn’t see the value of selling over the Internet, while another 31 percent were concerned that online operations would be too expensive. A full one-quarter indicated that their customers were not online.
The good news is that 80 percent of the small businesses surveyed were currently involved with e-commerce in some way.
| Small Biz Involvement in Online Sales | |
|---|---|
| Have own Web site | 51% |
| Selling through another site | 27% |
| E-marketplace participation | 24% |
| Other Internet methods | 27% |
| Source: Thomas Regional | |
Many small biz owners are aware of the challenges involved with an e-commerce operation, with 61 percent indicating that they were very interested in learning how to drive traffic, and 56 percent curious about search engine listings. More sophisticated online issues were of concern too: 53 percent want to know about generating sales leads online; 52 percent were very interested in online promotion; 49 percent were curious about tracking online marketing effectiveness; and 40 percent were interested in security issues.
Growing Pains
While owners of small businesses hope for a year of growth, some are finding it difficult to navigate the steps. The study found that 29 percent of respondents say they need help in obtaining a loan; 44 percent state that access to capital is a challenge; and 36 percent would like help in obtaining government contracts.
While more than six-in-ten respondents sought advice from a variety of governmental agencies (including state and local organizations) when starting their own businesses, 53 percent plan to turn to family and colleagues for advice on growth.
The Thomas Regional study also revealed:
- 63 percent of the respondents state that healthcare coverage is their biggest challenge
- 44 percent of respondents cite improving profit margins and finding and keeping quality employees as growth challenges
- 49 percent specifically state they need help with marketing products/services
Life After Work
Few of the small business owners have considered the next phase of their lives, as 20 percent say they haven’t given much thought to succession planning or retirement.
| Small Biz Owner Retirement Stats | |
|---|---|
| Plan to retire between ages 65 and 74 | 40% |
| Plan to wait until age 75 | 17% |
| Don’t plan to retire | 14% |
| Family will run business after retirement | 32% |
| Plan to sell business at retirement | 31% |
| Close business and sell assets | 16% |
| Post-retirement travel to exotic locations | 26% |
| Post-retirement travel around the U.S. in a recreational vehicle | 19% |
| Post-retirement plan is to do nothing in particular | 21% |
| Source: Thomas Regional | |
