Fewer small business owners (24 percent) are planning to add jobs or positions in their companies this year, a decrease from last quarter, according to Wells Fargo/Gallup Small Business Index survey, conducted Jan. 3 to 10.
However, 64 percent of business owners expect their revenues to increase a lot or a little in the next 12 months, and 81 percent expect their company’s cash flow will be very good or somewhat good in the same time period. Additionally, 84 percent expect their financial situation to be somewhat good or very good 12 months from now, and 80 percent said their current financial situation is somewhat good or very good.
Regarding the national economy, 67 percent rated it as either good or excellent, a 4-point increase from last quarter. Just a quarter of business owners say that the overall economy affects their business a great deal, however.
“It’s promising to see that, in general, business owners remain optimistic,” said Elli Dai, Wells Fargo’s head of small business and personal lending group in a statement. “As we look ahead to the rest of the year, it’s helpful to know what’s impacting their businesses and the decisions they are looking to make. Only when we understand our customers can we better support their financial goals and continued growth.”
Digital marketing now can play a major role for small business success … Investment in managing their online presence can have a great payoff for small businesses in attracting and retaining customers.
– Linda Soldatos, head of Wells Fargo’s small business marketing
The survey also focused on how owners feel about attracting customers and new business.
Attracting customers is a bigger problem than retaining existing customers, according to 82 percent of respondents. When attracting new business, owners’ biggest challenges include the basics of finding and then retaining new customers, creating the right mix of advertising and marketing, dealing with competition for customers, keeping prices low, customer service and staffing, and having enough money to run the business effectively, according to the survey.
To attract and retain customers in the next 12 months, 65 percent of business owners highlighted increasing networking opportunities, 52 percent said they would obtain customer feedback, 51 percent said they would increase their social media presence, 49 percent said they would update their website, and 38 percent noted they would increase spending on advertising and marketing.
Online reviews are growing in importance for small business owners, according to the survey. More than half of small business owners (53 percent) have access to user reviews online and 69 percent of those business owners say that reviews are extremely or very important to them. Two out of three owners with access to reviews online encourage their customers to post positive feedback, and the same amount reported that they post responses to online reviews when it’s necessary.
“Digital marketing now can play a major role for small business success – allowing them to engage with customers directly through social media, get real-time customer feedback, and build their online reputation with customer reviews,” said Linda Soldatos, head of Wells Fargo’s small business marketing in a statement. “Investment in managing their online presence can have a great payoff for small businesses in attracting and retaining customers.”