In our work at First Street, the most frequently asked questions we get are the following: how strong is the local economy?, How optimistic are local business owners? Is it a good time to sell or buy a business? What percentage should we spend on marketing? The list goes on, but you get the idea.
Therefore, I was intrigued when I came across an interesting survey of 1,088 small business owners, leaders and influencers by Brian Sutter, Director of Marketing at Wasp Barcode Technologies. This report gives the facts that answer some of those frequently asked questions. Here are the highlights in the Small Business Report:
Confidence in the economy vs. 12 months ago? 12% felt “Significantly Better” about the economy, 35% said “Slightly Higher”, and 31% reported “No Change.”
Do you anticipate Revenue Growth for 2015? 57% expect it to grow, 26% expect it to be flat and 9% felt it would decline. A side note, product companies expect growth more than Non-product companies… 41% of product companies anticipate at least a 5% increase.
One of the most interesting findings for me were on strategies to achieve expected revenue growth. 56% were focused on improving existing customer experience & retention – which often means “work smarter and harder” vs. true financial investment.
- 45% plan to invest in new customer acquisition activities & methods.
- 20% to invest in new tools to improve employee productivity.
- 27% expand into new markets
- 22% launch new products/services
- 18% plan to hire new employees
Another response that peaked my interest was specifying their top 5 business challenges. Other than the #1 reason, there were some major differences between companies with 11-50 employees vs. 51-100 employees.
- Growing Revenues (same for both)
- Increasing Profits vs. Hiring Employees
- Cash flow vs. Employee Healthcare
- Hiring Employees vs. Government Regulation
- Raising Capital/Funding vs. Increasing Profit
And now for the answer to one of the top questions asked by many of our clients… What percentage of revenue should be spent on Marketing?
- 56% spend less than 3%
- 34% more than 4%
Many of us know that IT investment can be very costly, time consuming and critical to a business to stay competitive in the marketplace. But, it’s also an area that can be easily put off. For this survey, 38% of the companies planned or anticipated an increase in IT spending in 2015.
The last question that I will highlight is How do companies handle inventory? 46% don’t currently track inventory at all. Of the remaining 54%, these are their responses:
- 34% use an inventory control software system
- 20% sited “other”
- 16% manual computer process
- 13% manual process (pen & paper)
- 9% part of their accounting system and 8% don’t track inventory
What are your plans for the remainder of 2015 to ensure growth and profitability? Are you feeling positive about the results thus far? In what areas will you invest? What tools will you use to measure the results? Do you have clear written strategy that has been communicated to all employees?
At First Street, we help you answer these questions and more. We can provide you with targeted information about your specific industry and how you compare to similar businesses. It’s all about your Return on Investment, ROI. Make sure you’re spending your cash wisely – in the areas of your business that will truly make a difference. Give us a call today at 603-501-3294 or email firstname.lastname@example.org!