CHICAGO--(BUSINESS WIRE)--Illinois small business owners are less optimistic about their local economy than their national counterparts, according to results of the 2014 U.S. Bank Small Business Annual Survey. The survey reveals trends in economic sentiment, issues of greatest concern to small business owners, plans for future hiring and capital expenditures, and innovation.
Now in its fifth year, the survey polled 3,173 small businesses during the first quarter of 2014, including 200 in Illinois, with $10 million or less in annual revenue across the 25 states where U.S. Bank provides small business banking services. A full breakdown of the survey is available online, as well as local highlights.
“We’re seeing small business owners here move forward cautiously, waiting for sustained demand before making big investments in their business. But by adding an employee or embracing new business strategies, it’s clear they’re looking for a competitive edge to position their business for growth when the economy improves,” said Greg Fioresi, regional small business banking manager for U.S. Bank in Chicago.
Illinois small business owners’ views of the country’s economy are in line with their national counterparts, as approximately half (53 percent) said they believe it is in a recovery. However, more than two-thirds (69 percent) said they believe the state’s economy is weaker than the national economy. This is significantly higher than the nationwide average of less than one-third (30 percent) of small business owners saying their local economy was weaker than the national.
Describe local economy as weaker than the national economy:
|Illinois small business owners||60%||67%||69%||69%|
|National small business owners (average)||41%||28%||28%||30%|
Although Illinois small business owners have had a more negative view of the local economy over the past four years than their national counterparts, sentiment has improved slightly. When asked to describe their local economy, three-quarters (77 percent) selected “fair” or “poor” (down from 87 percent in 2011) and one-quarter (23 percent) selected “good,” “very good” or “excellent” (up from 13 percent in 2011). This year they said that taxes and local government budgeting were reasons to feel worse about the state’s economy, and lower unemployment and higher wages were reasons to feel better.
Investing In Their Business
According to the survey, small business owners in Illinois and across the country are hesitant to make significant investments in their business such as hiring. Illinois small business owners’ were in line with national averages, as 29 percent said they were likely to make a capital expenditure in the next year, same as the national average, and 20 percent said they planned to add to staff in the next year, also same as the national average.
Like their national counterparts, concern about healthcare is the top national issue for Illinois small business owners in 2014, as one in four (26 percent) said they believe the national health care reform law will be positive for their business in the long run. The next most prominent national issues were taxes and unemployment.
The overwhelming majority of Illinois small business owners surveyed described themselves as “Working to Live” (70 percent) rather than “Living to Work” (30 percent) when asked to choose between the two.
Technology & Innovation
Illinois small business owners are ahead of the curve when it comes to technology. They are more likely than the general population to be innovators and early adopters of new technology, according to the survey.
Mobile capabilities are among the ways that business owners are taking advantage of technology. On a local level, 76 percent of Illinois small business owners (compared to 75 percent nationally) said they have integrated mobile technology into their business strategy, whether through mobile banking, social networking, web design, payments or other uses.
In addition to looking to new technology to position their businesses in the marketplace, 70 percent of Illinois small business owners (compared to 64 percent nationally) maintain a social media presence to make connections, find talent or market their business. Those who maintain a presence said that Facebook was most effective, followed closely by LinkedIn.
U.S. Bank’s commitment to the small business owner extends beyond banking and lending. U.S. Bank’s small business website, U.S. Bank Connect™, offers advice and networking opportunities to business owners of varying sizes and stages of their business life cycle. In addition to advisory and networking resources available on Connect, U.S. Bank has introduced a number of products and services since last year’s survey to help small business owners add capabilities and improve efficiencies to their payments process:
- Rebranding and Enhancing Rewards for Credit Card Suite: Earlier this year, U.S. Bank introduced a newly-designed, more rewarding suite of credit cards: U.S. Bank Business Edge. Business Edge, which features a number of card options to suit the type of small business and needs of the owner, provides flexible tools that can help business owners simplify spending, manage cash flow and get rewards for spending.
- Credit Card for Nonprofit Organizations: With the U.S. Bank Visa® Community Credit Card, nonprofit organizations and small municipalities can now apply for a card with fewer fees, a powerful online expense-management tool and other features crafted to their unique needs. The U.S. Bank Visa® Community Credit Card has no annual fees, no late fees and no over-limit fees and is now offered in all U.S. Bank branches.
- Program to Control How Business Cards Are Used: U.S. Bank was the first bank in the nation to offer Visa Payment Controls, which gives small business owners control over how, when and where their employees’ business credit cards are used, giving them more time focused on their business and less time worrying about how their business credit cards are being used by their employees. Online management controls let small business owners manage how employees can use their cards based on time of day or day of week, geographical area, certain merchant types, dollar amount and/or transaction types, such as cash advances or cash withdrawals.
- Easy-To-Use Customer Loyalty Program: U.S. Bancorp subsidiary Elavon, a leading global payment solutions provider, launched Fanfare, an easy-to-use loyalty program that delivers rewards to patrons of small to mid-sized businesses right at the point-of-sale. With Fanfare, businesses can build deeper relationships with their customers by providing meaningful rewards via integrated technology. Fanfare enables customers to sign up and track loyalty rewards via a customized website.
- Continued Mobile Innovation: U.S. Bank is an industry leader in providing mobile banking services to businesses and consumers. In addition to features such as photo check deposit, U.S. Bank offers solutions for small business owners to accept mobile payments and is working on new programs that help businesses grow customer loyalty and take advantage of the latest technology to connect with their customers on their smartphone.
About U.S. Bank
U.S. Bancorp (NYSE: USB), with $371 billion in assets as of March 31, 2014, is the parent company of U.S. Bank National Association, the 5th largest commercial bank in the United States. The Company operates 3,083 banking offices in 25 states and 4,878 ATMs and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions. Visit U.S. Bancorp on the web at usbank.com.