And, now cometh a new survey. One by USBancorp, the fifth largest commercial bank in the US (grown by merger of banks in the West and the Upper Midwest). One in its third year- and it is an annual survey. But, their definition of small business is different than that of BankofAmerica, which I discussed on 31 May 2012. (I told you we did not have uniform definitions!) USBank (the name under which USBancorp operates) polled 3220 businesses (small?) with $10 million in revenues or less. (BankofAmerica limited their polling choices to those with half that turnover. (The survey results are no longer found on the web [2020].)
The majority of the respondents had fewer than 10 employees, with more than 1/3 in business for 20 years or so. 1/3 of them were from the markets in which USBank operates and the other 2/3 were from 11 other markets [from Arizona, Northern California, Southern California, Colorado, Illinois, Minnesota, Missouri, Ohio, Oregon, Washington and Wisconsin]. It’s my guess that these are the next target expansion markets for the bank. As opposed to the BankofAmerica survey, however, 26% of these companies were among those that I don’t consider to be representative of small business (since they had no employees), nearly 30% had annual sales below $ 100K, and 33% of the “employees” were less than full-time (all of which criteria were excluded from the BankofAmerica demographic). The USBancorp survey of firms included 9% with more than 40 employees. (BankofAmerica limited their survey to those with 50 employees or fewer.)
While 71% of the respondents considered the US to still be in a recession, that is down from the 89% and 78% from the previous two years; results. And, contrary to the BankofAmerica survey, only 1/3 thought their local economy was stronger than the national economy. (But, look at the map where this survey was taken; these are among the harder hit states.) Almost 70% thought their business’ financial health was good or excellent (up slightly from the previous year). And, 29% had gross revenues increase from the previous year, with not quite half expecting revenue increases through next year. But, there is a dichotomy- those with $ 1 million in gross revenue. 40% of these “larger” small firms report an increased gross revenue in 2011, with 58% expecting revenue growth in 2012, with 34% expecting to hire at least one new person in 2012. (This is in concert with the BankofAmerica survey.)
The major concerns of the respondents were economic uncertainty and poor sales, with health reform filling out the troika of top concerns. (Those in WA, OR, CA, and IL were noticeably less perturbed about health care reform.) These small business owners reported that their primary 2012 election year concerns (when compared to the last Presidential election) were Medicare/health care, federal debt, jobs and unemployment, the costs of energy, and taxes.
It’s always interesting to see other perspectives. I wonder how many of those small business owners actually run the numbers to back up their opinion or are basing it on instinct.
Nicole Bandes recently posted..Why Helping Others is a Key to Getting What YOU Want
Nicole:
It’s my guess that that solopreneurs are going to rely on their gut feel. Most don’t even run P&L statements- until it’t time to do their income taxes. (Even then, they rely on someone else to do it for them.)
Most small businesses with 5 or more employees have better systems.
However, all executives rely on gut feel. Otherwise, why would so many of them claim they want Republican regimes, when over time, it is clear their results are better under Democratic oversight.
Roy
What jobs? People are being laid off right and left. There go the homes. Older workers cannot find new jobs. Healthcare becomes a lack of healthcare. Even the charities that used to be able to help people can’t because the people who used to donate are now the ones asking for help. There is none. It’s not that everyone is dirt broke, but they are so afraid that they don’t give. And they are afraid with good reason. Around here in Texas, people are being let go with no warning and not much help. It’s frightful, not just problematic. I am firmly convinced that bankers are idiots who don’t see what is in front of them. The surveys you have shown us, Roy, make me even more sure of this. Thanks.–Annie
Oh, Ann, you are conflating big business and small businesses. Even if a small business folks, it won’t make the newspaper- because only 1, 2, or 10 people are affected. HP laying off 30,000- that’s big news. Oracle slashing 2000- big news. But, most small businesses are not laying people off.
Even though bankers rarely give small business folks the time of day- unless they want to refinance their homes for the expansion or new market development efforts.
Roy
Hi, Roy! Can you conclude that small businesses are doing better than the previous years from that survey, at least in that region?
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Gustavo:
Both studies indicated that the economy seems to be improving- but still not “well”. The feeling that we are within a recession has dropped from 90% to 70%, for example.
One must note, however, that these small businesses surveyed rely on the local economy more than the national and international economy. So, their outlook is very different from a small pharmaceutical entity that will be selling its wares across the US – and maybe internationally. As a concrete example, I serve two different law firms (plus a biotech and a manufacturing entity, with many others involving lesser time commitments by our firm). One is a family law specialist and the other a patent law agency. The former is strictly local- it only operates within the Commonwealth of Virginia- and while we do have cases in Charlottesville, Richmond, and elsewhere, our efforts are primarily in Northern Virginia. The patent law firm has international clients. The outlook for both of these firms is vastly different. (It also is of interest that divorces are less frequent during downturns- and this one, based upon the failure of the housing industry, is more devastating that most, since the largest family asset is typically the home.)
Roy
I sure wish my small business made ten million in revenues! Thanks for some interesting stats Roy.
Suerae Stein recently posted..Pretty in Pink
Suerae,
I’m sure it does- just not in one year!
Seriously, that was one of my complaints about this census. It would have been better to separate out the results into two studies.
Solopreneurs (those with no employees or one employee). And, everyone else. The differences would be an amazing (at least from my discussions with firms in these two census groups).
And, yes, I found the results of interest, as well.
Thanks for your comment.
Looking at the results, they went looking for certain answers by asking certain questions and they got answers the answers to those questions. I wonder what would have happened if they asked different questions? In Auckland the chamber of commerce offers different options and gets some interesting results and then occasionally MYOB does a survey of small business in NZ and gets other results.
Its all in the questions asked.
Roberta Budvietas, recently posted..When No is a Positive Word
Roberta…
EVERY survey has an agenda to get the answers they hope to achieve. In this case (and, for most surveys), I am much less likely to pay attention to the political complaints that are among the findings, since the questions are always self-serving. (Are you for health care reform? Of course, every one is. Or, are you for balancing the budget? Sure, as long as you cut the items that affect them and not me. The devil is in the details. )
But, whether your business is doing well or whether you plan to hire folks- they provide useful answers to me- and to most folks.
Roy
Thanks, Roy.
A welter of numbers in your last two posts! Please speculate on how any of these data might influence our federal and state governments, who are already mightily influenced by lobbyists representing the upper reaches of so-called “small businesses”, and way beyond. Could you also speculate on what we small businesses ourselves might do on our own, after we come to grasp these numbers? What productive responses might be likely?
-Robbie
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Robbie:
I have lots of ideas. Fortunately or unfortunately, a lot of them are enmeshed with my political views, which may not be among yours.
For starters, I never understood why small business was willing to throw in its lot with the Chamber of Commerce. No, not the local groups (for which most I also have little use, since they seem devoted to the need to augment tourism and visitors and not to promoting small business), but the US National. The one that serves as a lobbyist for BIG business, espousing its interests 24 X 7.
I am not going to espouse the development of a new organization- but that would be useful. One that would push for our interests. Years ago, I was Director for the American Association of Small Research Companies. And, even though I had no (ok, maybe a teeny weeny bit) interest in government work, we worked with three agencies to develop small business set-asides. Which are now enshrined in law- and serve as a bitter joke. No longer does the DOD or DOE (to name two) really set-aside (as required by law) funds which afford small business a more even playing field to obtain government work. No, we’ve redefined small business to include behemoths. We’ve required small business to partner with large businesses, which commandeer the efforts to their benefit. Perhaps another version of the AASRC would be in order. (I actually think this really is among the best methods to change events.)
It used to be that small business had more effectiveness at the state level. But, now we have ALEC- the American Legislative Executive Council- that lobbies for special interest. Well, not really. This charlatan “charity” is nothing but a lobbying group, providing full texts of laws to legislators it pays (bribes?) to have passed and enacted into law. It’s why so many of our state’s laws are identical across this nation. They got their marching orders from this lobby.
But, we still can reach our state legislators. As opposed to our “national” representatives who are more interested in meeting those who can fill their re-election coffers.
We can – and should- reach our local magazines and newspapers to explain our stories. Which will make it easier for others to understand our plight- and our benefits. Explain how many folks our 2000 local businesses employ in our community- as opposed to the Target or WalMart which employs 50 part-timers and gets the tax considerations to locate among us and compete.
Ok, Robbie- I have to go run my company, so my political soapbox needs a little vacation now.
Thanks for your comment. And, you logical and well-thought plaint. Let’s all get together and make this place better!
Curious what the 2008 election year concerns were in comparison?
Carolina HeartStrings recently posted..WORDLESS WEDNESDAY
Alessa:
The surveyors had a list of concerns and the respondents were choosing which ones were more on their mind this time than 2008. Since the survey is only 3 years old, the surveyors were relying on our memories- which are faulty at best!
Roy