Seventy-nine percent of small-business owners continue to make growing their business a priority, but many are making personal sacrifices in the process.
According to the American Express OPEN Small Business Growth Pulse, 89% of small businesses indicate they invest a significant amount of their personal time to grow their business. Six in ten say they spend a larger percentage of time working on their business to drive growth than in their business managing details.
More than two-thirds (68%) of survey participants invest a substantial portion of their personal savings to help their businesses grow. But there is a difference between male and female business owners. Male business owners (72%) are more likely than their female counterparts (62%) to be investing personal funds to grow their business.
As they follow their path to growth, a number of small-business owners are planning both capital and talent investments. As many as 59% plan to hire staff over the next six months. Among those with hiring plans, 29% are planning to hire only full-time workers; 22% are planning to hire only part-time workers; and 8% are planning to hire both full and part-time workers.
Additionally, 71% plan to make capital investments, which include investments in computer and systems software/additional software licenses (42%) and manufacturing/production equipment (23%).
“As 2016 unfolds, small business owners are working harder than ever to position their businesses for growth,” said Janey Whiteside, SVP & GM Customer Marketing & Relationship Management, American Express OPEN. “The personal commitments that small business owners make are vital to their success, and their planned investments are indicative of how important growth is in the coming year.”
Challenges to growth
While survey participants remain confident in their ability to grow their businesses, the economy remains a top concern. Uncertain economic conditions were identified as the single greatest challenge business owners face (24%; up from 17% in August 2015), followed by concerns about the rising costs of doing business (17%; flat from August).
Cash flow is another cause for concern, as nearly two-thirds (64%) of small business owners expect to experience cash flow issues over the next six months. Their greatest cash flow concerns include:
- Having enough cash on hand to win new business (18%)
- The ability to accurately track cash flow (16%)
- Accounts receivable (14%)
Despite these headwinds, small-business owners see various ways to meet these challenges and grow their businesses. When asked about the top two most important triggers that could take their business to the next level, 40% said expanding their product/service offerings, while 34% said expanding the market for their current products and services.
The majority of survey participants are confident that they can access the funding they need to grow their business. When looking at how they will fund and grow their businesses, 71% identify credit and charge cards as an important tool and 35% see them as a “very” important tool.
Given the importance of credit cards as a source of short-term funding, three quarters (76%) of survey participants who use credit cards for business expenses indicate that an increase in their credit limit would be beneficial to their business. And among those who have hit their credit limit, more than half (57%) have attempted to have their limit increased.
The survey is based on an online sample of 1,001 U.S. small-business owners/managers of companies with $250,000 or more in revenues and fewer than 100 employees. It was conducted via the Internet by Ebiquity from December 9-18, 2015.