A new survey of small business owners in the U.S. indicates that the percentage who report favorable business conditions has nearly doubled since 2010.
The survey, by Citibank, found that 43 percent of small business owners consider business conditions to be positive. That represents a significant increase since August 2010, when 24 percent of small business owners surveyed reported overall positive business conditions.
One-third (33 percent) of the survey respondents said their own business is better than it was a year ago -- up from 26 percent in January. Another 33 percent expect their business will grow by more than 10 percent this year.
"Small business owners risk everything to pursue their dreams and are willing to do what it takes to make it," said Citi Small Business managing director Maria Veltre in a statement. "Their personal sacrifices, passion and ability to adapt have positioned them to capitalize on improving business conditions."
Fifty-three percent of the survey respondents said they have reinvented their business "to stay afloat or competitive." This strategy is reinforced in the current competitive climate, which 38 percent of respondents describe as "extremely intense."
As part of the reinvention process, small business owners said they have focused on overhauling the products or services they offered (47 percent). This was followed by adjusting their infrastructure, such as technology or staffing (24 percent) and beefing up their sales and marketing (18 percent). A small amount (7 percent) said they reduced pricing and took less profit. Only 3 percent have relocated.
The following steps were cited as ways that small business owners kept their business thriving: 88 percent kept updated and knowledgeable about their field, 70 percent increased face time with customers, 67 percent updated or upgraded their computer systems, 52 percent increased their use of the Internet and social media, and 51 percent built a network of suppliers and partner companies.
As for the steps they plan to take during the remainder of 2012, 65 percent expect to increase marketing, 56 percent will work to get better pricing on expenses, 52 percent expect to work even longer hours, 50 percent will introduce new products or services, and 49 percent will use social media, such as Facebook or Twitter, to market their business.
"Small business owners should consider these steps as a check list for growth and survival," said Veltre. "Never one to sit idle, a small business owner continually invests in change in order to stay relevant."
Part of that reinvention comes from spending, as shown by 38 percent of respondents who increased the amount they spent on capital investments such as computer, inventory and facilities over the past 12 months. Their top two sources of funding have been revenue and profits (75 percent) and personal savings (62 percent).
The past few years have taken a personal toll on small business owners: 63 percent said the major challenge they face owning or running a business was personal stress and being accountable for everyone and everything, second only to the general state of the economy (66 percent).
Despite overall optimism, small business owners report making significant sacrifices to keep their businesses going and growing over the past few years. Not only did 78 percent take less profit to support the business at some point in the past, 66 percent did so to pay employees rather than reduce staff. A significant majority (70 percent) also say they worked more hours than usual, often sacrificing family time and missing vacations.
In addition to using their own money to help their business survive (69 percent), the majority of small business owners (54 percent) said they have gone without a paycheck. Looking back over the history of their businesses, almost one-quarter (23 percent) have gone without pay for one year or more.
Eighty percent of small business owners believe their employees appreciate the sacrifices they made to keep their businesses operating. Demonstrating true commitment, employees showed thanks by their own investment in the success of the company. More than one-third (38 percent) of owners said their employees worked additional hours without pay. Another 18 percent credited their employees with voluntarily missed or delayed paychecks.
To show their own appreciation of employees, small business owners offered additional time off (78 percent), a bonus (74 percent) or a raise (70 percent).
Customers, too, appreciate the stress and sacrifice of running a company. Almost seven in ten (69 percent) survey respondents saod their customers recognize and appreciate their sacrifices. Even more (87 percent) say they have been thanked by customers.
"The level of appreciation shown to small business owners by employees and customers is uplifting," said Veltre. "We encourage everyone to thank their favorite small business owner. Small business is a highly personal undertaking; to the small business owner a simple, personal gesture of appreciation goes a long way."
