One of the questions I get most often is, “How does what I’m doing compare to businesses like me?”
It’s a tough question to answer because every small business is unique. That being said, we recently built a research panel of small businesses to help us better understand and serve our customers’ needs.
One of the first things we wanted to do with this panel is to take the temperature of the small business community, and put the results out in the world for everyone to see and compare their own experiences.
So, what did we learn?
A majority of small businesses are experiencing revenue growth, however, attracting new customers continues to keep small business owners up at night.
Here’s a look at our findings:
1. 2012 has been positive for the majority of small businesses
When asked how their organization has done so far this year:
• 59% of SMBs say revenues have increased in 2012 (Tweet this)
• 30% of SMBs say revenues have remained flat in 2012 (Tweet this)
• 11% of SMBs say revenues have decreased in 2012 (Tweet this)
2. The continued outlook is positive, with 79% of small business owners expecting revenues to increase over their 2011 revenues
When asked what their revenue expectations are for 2012 compared to last year:
• 52% of SMBs expect their revenues to increase more than 10% in 2012 (Tweet this)
• 27% of SMBs expect their revenues to increase less than 10% in 2012 (Tweet this)
• 13% of SMBs expect their revenues to remain flat in 2012 (Tweet this)
• 4% of SMBs expect their revenues to decrease less than 10% in 2012; 3% expect their revenues to decrease more than 10% from 2011 (Tweet this)
3. Rising costs remain a challenge, with 45% of small businesses reporting their operating costs have increased
Further, a full 30% report their cash flow is inadequate and preventing them from growing their business. Of the 19% of small businesses that have sought funding this year, only 16% got some or all of the funding they needed.
4. Increased revenues have not yet translated into aggressive hiring
66% of small businesses are not planning to hire additional full-time employees in the next six months. Almost 20% said they need to hire more employees but can’t.
5. Though the outlook is brightening for small businesses, challenges remain, primarily around how to achieve growth
When asked about what keeps them up at night:
• 76% of SMB owners worry about how to attract new customers (Tweet this)
• 49% of SMB owners worry about how to connect with, and better engage with, existing customers (Tweet this)
• 41% of SMB owners worry about how to get referrals from current customers (Tweet this)
While attracting and engaging customers is a top concern, marketing spending has stayed steady for most of the small businesses surveyed. 60% report keeping their marketing budget the same as 2011, and only 29% have increased their budget.
When asked which marketing activities they find to be effective for their organization today:
• 83% of SMBs find email marketing to be the most effective marketing tool (Tweet this)
• 71% of SMBs find website marketing to be the most effective marketing tool (Tweet this)
• 68% of SMBs find in-person interactions to be the most effective marketing tool (Tweet this)
• 49% of SMBs find social media to be the most effective marketing tool (Tweet this)
6. 53% of small business owners ranked social media as the marketing channel they need the most help with
This means social media could play a more prominent marketing role if they were more confident in their social media skills.
Among social media tools, Facebook still rules the day. When respondents active in social media were asked which tool was most effective:
• 75% of SMBs found Facebook to be the most effective social media network (Tweet this)
• 10% of SMBs found LinkedIn to be the most effective social media network (Tweet this)
• 7% of SMBs found Twitter to be the most effective social media network (Tweet this)
• 1-3% of SMBs found Pinterest, Google+, YouTube, and Yelp to be the most effective social media networks (Tweet this)
About the Survey
This Constant Contact-sponsored survey was administered in May 2012 to 1000 participants in the Constant Contact Small Biz Council—a research panel of US small businesses and nonprofits recruited from the Constant Contact customer base. This is the first installment of an ongoing study about the state of small businesses and the ways they connect with, and grow, their audiences. Results include responses from 728 respondents across a range of business-to-business and business-to-consumer industries.
How does your small business match up to these results? Tell us in the comments.