The Radio sales business is a wonderful business to be in right now because small business owners need local Radio now more than ever before. But with all of the bad news on Wall Street, it's important to keep "stinkin thinkin" off of Main Street.
Small business is important to the economy because small business is American business. The Small Business Administration notes that “small firms,” defined as employing fewer than 500 employees (and most employ less than a tenth that many), make up 99.9 percent of the 27.2 million businesses across the nation. They provide about half of all private-sector jobs, generate up to 80 percent of new jobs each year and create more than half of non-farm gross domestic product.
Research indicates that American small business owners plan on working hard to hang in there and be successful. They need the help of local Radio to hold on to their current customers. They need our help to grown their business. They need our help to hire new employees.
Susan Sobbott, president American Express OPEN, says "Entrepreneurs are nimble and have strategies in place to manage business challenges. They are decreasing investments, adjusting expansion plans to capital on-hand, cutting expenses and focusing on adapting to customer demand.
Three quarters of business owners plan to grow their businesses over the next six months, but keeping and maintaining current business and sources of revenue has surpassed growth as the top priority for entrepreneurs. To help retain their current sources of business, entrepreneurs will place a heightened focus on better servicing customers to set their business apart from competitors. Advertising on local Radio is the most affordable and most effective way for a small business to remain Top of Mind.
To gain deeper insight into the effects of the current economy on business owners, the survey also examined three key small business sectors that serve as an indicator for the economy: manufacturing, retail and services.
Among these industries, optimism and growth are not always linked. Business owners in the services sector are among the most optimistic (53%) and most likely to have hiring plans (44%), but least likely to have plans for growth. The biggest business challenge they face is the uncertain economy.
Given their reliance on consumer spending, it is no surprise that retailers are least optimistic (48%) among these business sectors. The biggest business challenge they face is the rising costs of doing business and the uncertain economy (both 29%). However retail entrepreneurs are also among the most likely to have plans for growth (81%); tied with their counterparts in the manufacturing sector.
Compared to the services and manufacturing sectors, retailers are the most likely to feel a significant impact as a result of higher gas and energy costs (69%), which includes having lost sales as a result of higher costs (56% vs. 40% of business owners overall and 37% of manufacturers and 33% of services companies). They are also among the most likely to have experienced cash flow issues and least likely to have capital investment plans. This is a strong indication that as local Radio stations, we need to be firm about our collection efforts.
Business owners in the manufacturing sector are among the most likely to have plans for growth; (81%) tied with counterparts in the retail sector and compared to businesses overall (74%). Half of manufacturers (52%) have an optimistic outlook. The biggest business challenge they face is rising costs and the uncertain economy (33% and 31%, respectively). The manufacturing sector is the most likely, when compared to both businesses overall and key business sectors, to make capital investments over the next six months (59%) and offer healthcare benefits to employees (58%). They are more willing to take a financial risk to grow their business and the least likely to experience cash flow concerns.
Business owners will employ a variety of tactics as they manage their businesses through the current economy. Nearly six in ten entrepreneurs (56%) find themselves reducing or accepting lower profit margins, which is also the top tactic for business owners in the services sector (48%). Half of business owners (51%) find themselves working longer hours in an effort to manage with retail business owners most likely to work longer hours (64%). Just under half will cut business or capital expenses (49%), will raise prices (48%) or will cut back or delay marketing expenses (46%). Business owners in the manufacturing sector are among the most likely to raise prices (63% vs. 60% of retailers and 40% of services companies).
Hiring plans are part of the game plan for one-third of entrepreneurs this fall (36%), on par with 38% this spring and up from 31% last fall. Four in ten business owners (44%) in the services sector have plans to hire over the next six months (vs. 30% of business owners in the manufacturing sector and 28% of businesses in the services sector).
Overall, seven in ten entrepreneurs with hiring plans (72%) say they need to hire to handle their growing business. More than half of these entrepreneurs with hiring plans (57%) will hire to help increase business volume. Nearly four in ten businesses overall will hire because they need seasonal help (38%), one-in-three say they will hire because they have a new business venture (34%) or they have finally found the right candidate for the position (31%).
Three out of four business owners (74%) plan to grow their business over the next six months, on par with 75% in fall 2007. Eight in ten business owners in the retail and manufacturing sectors report plans for growth (each 81% vs. 67% of services companies).
As business owners overall look to grow their companies, the majority (86%) still rank differentiating their businesses by offering exceptional customer service as the number one management tactic, up from 77% last fall. Women are even more likely to focus on customer service over the next six months (96% vs. 80% of men). In an effort to retain customers in the current economic environment, 32% of business owners institute loyalty programs, 28% offer discounts and 9% offer special payment.
About half of all entrepreneurs (49%) are willing to take a financial risk to grow their businesses, which is on par with this spring (51%) but down from fall 2007 (57%). Business owners in the manufacturing sector are the most willing to take a financial risk to grow (57% vs. 48% of retailers and 42% of service companies).
When you look at all of this information it is clear that the small business owner doesn't plan to roll over and die. They are planning to roll up their sleeves and fight. So, it's time for us to roll up our sleeves and get out there and help these business owners grow and prosper. Local Radio is the most affordable and most effective way for a small business owner to reach out and talk to the consumers.
Talk to you soon.
