Whether you are a serial entrepreneur or a corporate America veteran who decided to take on the Small Business world, as a business owner, there is a good chance you have sacrificed a lot to get your business up and running. At the beginning, you had to do absolutely everything to keep your business afloat and because of that you probably knew exactly where your biz stood financially and what the future looked like. Now you have grown, hired help, and might get to relax a little. But, surveys such as the National Federation of Independent Business’ (NFIB) ‘Optimism Reports’ suggest small businesses should pay attention to the trends and act accordingly.
As mentioned in my last post, small businesses are considered the backbone of America and are what many financial analysts predict will be the very medium to drive us out of this financial downturn. With regards to the ‘Optimism Reports’, this point does not seem to be stressed quite enough. These reports should definitely be taken seriously, however you should not let them hold you back, especially if you are new to the Small Business game. These surveys and reports can be good indications of the state of small business, but at the end of the day, your business will be as successful as you make it. These days in small business, only the strong will survive.
Small Business ‘Optimism’ Reports have been around for decades and are very widely read and respected. Large entities such as Citibank, Wells Fargo, FedEx, and CapitolOne all conduct their small business surveys to gauge things like earnings, hiring, and projections to figure out the overall sense of how ‘Main Street’ businesses are doing. Sample sizes and survey procedures vary report to report, but I will shed some light on how Capitol One conducts theirs:
– SMB defined as having $10 Million or less in 2010 revenue.
– 1,903 businesses surveyed.
– All interviews conducted March 11-29, 2011 by automated phone message.
– Samples taken from New York, New Jersey, Texas, Washington D.C., and Louisiana.
Samples sizes aside, and maybe I am being naive, but it seems like these research companies could broaden their survey methods a little. If they are able to procure close to 2,000 surveys nationwide, it doesn’t seem impossible that they could get 100-200 responses per state. Having all 50 states represented seems like an obvious step examining Small Business in the US. Especially when you consider there are close to 30 million small businesses in the US according the sba.gov.
Most all reports agree show that the Index has been dropping month by month in the US, but these same reports go on to show that projected hiring is on the rise. While I can follow clearly what all of these reports are saying, frankly, they are so dry and send so many mixed messages, it seems as though their existence is part of the problem.
Ignorance is bliss, right? Obviously taking an attitude of ignorance could potentially end in business suicide, but I think this adage can lend to what is going on with these ‘Optimism Reports’ that are spread around so frequently due to the fact that their messages are so conflicting.
At a time when optimism is low, the small business culture seems to be taking on the theory of survival of the fittest. Instead of looking at the state of small business as anemic, I think Main Street America is cutting the fat and choosing a lean diet. The strongest small businesses will flex their muscles and survive while weaker businesses will fade out of the marketplace.
SMB need to make sure, now more than ever, that their approach and day-to-day is in line with their goals and forecasts. Decision-making should be sharp and quick after the best possible analysis of situations. If the culture of your biz is toxic, get rid of the cancer. Keep track of every piece of data (customers, sales, training) so that you can keep your financial situation in line and easily pinpoint areas of poor performance.
At the end of the day, these ‘Optimism’ reports, though not currently optimistic at all, are definitely important to keep track of. Even if the sampling methods may be skewed, they do pick up on certain trends that should be followed. It will be interesting to see which way these reports start to trend in the coming months, but I am pulling for Small Business.