Survey: U.S. small businesses move beyond stability toward growth
Today we released our fourth annual Bank of the West Small Business Survey, titled “Primed for Growth” because it summarizes well what we’ve learned this year. As the overall U.S. economy continues to grow, it’s having a positive impact on the outlook for many small business owners today.
Our survey found that 78% of small business owners invested in their companies in the past year, and 72% plan to invest in the coming year — a sign of American business confidence and optimism about the future. In addition, both profitability and revenue in the last year were up for approximately 40% of the surveyed businesses.A new, annual index
With this survey we introduced the Bank of the West Small Business Growth Index, a new way to benchmark year-over-year growth sentiment of small businesses. The Index tracks five key indicators (profitability, revenue, sales, investments, and cutbacks) of the surveyed businesses and tallies them into an overall index score. On the scale of 0-100, less than 50 signals decline and greater than 50 indicates growth.
This year’s number, 54, illustrates the upturn in financial conditions and reflects small businesses’ focus on investing back into their businesses. You can learn more about the Index results in this fact sheet.Key role for technology
Our survey also found the growth path for small businesses may be paved with technology. Four out of five survey respondents agree that technology is important to future growth, and about 60% believe technology’s importance will grow over the next three years. Primary areas of focus for technology investment include attracting new customers (49%), providing a better client experience (45%), and increasing efficiency and streamlining internal processes (34%). The biggest barrier, respondents said, is how best to integrate new technology solutions into their businesses.
The connection between technology investment and growth came through loud and clear in this survey. Small businesses experiencing growth were nearly twice as likely as contracting businesses to say that investing in technology is extremely or very important to their business’s success in the next year.
This year’s research, conducted by Harris Poll, focused on 499 U.S. small business owners and their experiences during this economic recovery.
I invite you to explore the results further in the fact sheet and infographic. To round out the data from our survey, we’ll post interviews in the coming days with two of our small-business clients who are investing in and growing their businesses. I enjoy learning from our clients’ experiences, and I hope you’ll benefit from them, too.