NEW YORK--(BUSINESS WIRE)--Small business optimism is growing, according to the OPEN from American Express ® Small Business Monitor, a semi-annual survey of small business owners. Only three in ten (30%) business owners say the downturn in the housing market has had a negative affect on their business, and 36% report plans to hire full and/or part-time staff in the next six months. The number of respondents who reported they would not be hiring over the next six months (29%) hit a six-year low.
Business owners are optimistic and clearly see the glass as “half-full”. According to the survey, 87% of business owners identify with this positive outlook. This optimism is reflected through their view on the economy and how it relates to their business.
“Entrepreneurs are a bellwether for many of the country’s most important industries because they are so closely connected to purchasing decisions,” said Susan Sobbott, president, OPEN from American Express. “Business owners continue to grow in their optimism, a good sign for the small business sector and the economy in general.”
The percentage of small business owners planning to make capital investments over the next six months remains on par with last spring (60% vs. 64%). Business owners will likely invest most heavily in the area of technology (45%). More are planning to make their next purchase in mid-priced equipment such as desktops, laptops, printers than a year ago (57% vs. 47%). One-in-five (20%) plan on making more substantial investments in major technology infrastructure such as software, servers or telephone systems. In addition to technology, other investment areas include office equipment (22%), office furnishings (15%), manufacturing/production equipment (14%) and real estate (13%).
Hiring Plans Remain Stable; Little Pressure on Wages
Over the next six months, one out of three (36%) businesses report plans to hire full and/or part-time staff, on par with 39% reported last spring. Among those, seven out of ten say they need to hire to handle their growing business or to help increase business volume (both 72%). Two out of five will hire because they need seasonal help (42%), and about one-in-three say they will hire because they have a new business venture (35%), or have finally found the right candidate for the position (30%).
Less than three-in-ten (28%) business owners report they need to raise salaries to find the qualified employees they need although substantially more men than women business owners believe they need to pay more to recruit talent (33% men vs. 21% women). Women and men also diverge on whether an increase in the minimum wage would hurt the small business community. Overall half of business owners (49%) do not agree that an increase in minimum wage would hurt the small business community. Women especially disagree that it would impact small business negatively (55%) whereas only 37% of men disagree with the idea.
Male or Female, Entrepreneurs Manage to Make Personal Time for Themselves
Business owners recognize the importance of “down-time” in their lives and most are satisfied with the amount of leisure time they have (81%). However, carving out this time does not come without stress. Two-thirds of business owners (64%) find it stressful balancing their personal life and their business. Women business owners are more stressed by work/life balance than their male counterparts (71% vs. 62%).
Two-thirds of business owners (67%) report they find themselves making sacrifices in order to be an entrepreneur. Among those who feel they are making sacrifices, family (52%) and friends (42%) are areas where they make the most sacrifices, followed by personal finances (36%) and health (35%). Male business owners are more likely to find themselves making sacrifices in their personal lives in order to be an entrepreneur when compared to women (73% vs. 65%).
As business owners find themselves trying to achieve balance, they identify flexibility as the most essential entrepreneurial attribute. One-third of business owners (34%) identify flexibility as the most essential aspect of being an entrepreneur. Following at a distance is working well under pressure (24%) and knowing the market (18%).
Taking their own advice on the importance of flexibility, two-thirds of business owners (64%) report making personal time for themselves during the business day. Men are slightly more likely than women to make personal time for themselves (66% vs. 60%). Although entrepreneurs realize the importance of taking time for themselves during the business day, nearly half (45%) consider taking time off from work to pursue a leisure activity a ‘guilty pleasure’. Female business owners are more than four times more likely than their male counterparts (18% vs. 4%) to consider ignoring an email as a ‘guilty pleasure’.
Exercise and Business Acumen Linked; Genders Differ on Idea Generation
There may indeed be a connection between exercise and business success. Fifty-nine percent of small business owners report exercising several times a week with nearly one-quarter (24%) exercising every day. Nearly three-in-ten (29%) business owners with companies over $1 million in revenues say they exercise every day. Female business owners are five times more likely than males to come up with their best ideas while exercising (10% vs. 2%), an indication of the gender differences in creativity and brain-storming.
Both sexes are using their personal time, when they are not thinking about business, to let creative juices flow. More than one-third of entrepreneurs (35%) report coming up with their best ideas during “down-time”. Male business owners are more than twice as likely as female business owners to come up with their best ideas on the way to work (18% vs. 7%). Women are also more likely than men to wake up in the middle of the night with ideas for their business (70% vs. 56%).
Male business owners are more likely than women owners to believe they take more risks than the average person (57% vs. 41%).
Familial Support is Universal
Whether male or female, the vast majority of entrepreneurs have the support of their significant other. Most entrepreneurs (89%) report a happy marriage or relationship with their spouse or significant other. Of those who report having a happy marriage, a similar number (81%) believe being an entrepreneur contributes to their happy marriage/relationship. Again, this percentage shifts among the sexes, women are more likely than men to report that this is true (85% vs. 77%).
Passion is Nothing New to Entrepreneurs
Four-in-ten (38%) respondents said the biggest influence in becoming an entrepreneur is passion. As an influence, passion is followed distantly by natural entrepreneurial inclination (20%) and being “born into it” (18%). Business owners are most passionate about building their customer base (34%). Turning a profit (27%) and closing the deal (15%) were of less importance.
Employee Well-being is Important Issue
When making business decisions, eight-in-ten business owners (80%) take into consideration how their decision will affect their employees and their livelihood. In terms of offering employee benefits, nearly seven-in-ten employers (69%) believe it is important to offer healthcare coverage to their employees.
Growth Does Not Necessarily Mean More Personal Sacrifices
Growth is a priority for a large majority of business owners. Over the next six months, seven in ten (71%) small business owners report planning to grow their businesses in a variety of ways. While most in this group (50%) plan to grow by selling more of the same product or service, one in five (22%) will introduce new products or services, and 14% will branch out into new markets or increase investments in their business (11%).
In the area of work/life balance, those driven by growth are only somewhat more likely to find balancing work and life stressful (66%) compared to small business owners overall (64%). Growth-focused small business owners are also only somewhat more likely to find themselves making sacrifices in their personal life in order to be an entrepreneur (70%) when compared to businesses overall (67%).
Parents Want Kids to Join in the Business
For many, business is a family affair, and six in ten entrepreneurs (61%) who are parents would like their children to join their business. Nearly one-in-five business owners (18%) are where they are today because they themselves took over a family business. This desire to share their business with family may be “unvoiced”, as slightly more than one-third of business owners (37%) have a succession plan in place for their business. Those with a succession plan in place plan for a child or family member to take over the business (47%), sell it (30%) or plan for an employee to take over (18%).
As entrepreneurs aim to alleviate stress and maintain balance in their lives they look for ways to spend more time with family and friends. The majority of entrepreneurs (63%) believe it is true that, ‘working with friends or their spouse/significant other benefits or would benefit their life’. Six in ten (61%) also believe working with friends or their spouse/significant other benefits or would benefit their business. Nearly all (90%) report their spouse or significant other as supportive of their decision to become an entrepreneur and more than half (57%) of business owners discuss business with their spouse/significant other on a daily basis.
Business owners believe the most important commitment they make to their family is getting involved around the house, including chores, homework and grocery shopping (32%). Male business owners are more likely to believe this to be true (37% men vs. 27% women). The most important commitment women business owners make to their family is always taking their calls when they are at work (32% women vs. 23% men).
More than Half of Entrepreneurs are on Track for Retirement
In terms of life upon retirement, nearly four-in-ten entrepreneurs (39%) believe social security will fund less than 25% of their retirement. More than half of entrepreneurs (58%) believe private investment accounts are a good way to save social security. More business owners are concerned about their ability to save for retirement this spring than last year (66% vs. 62% in 2006). More than half (57%) of business owners report they are on track to save the funds they need for retirement vs. 55% last spring.
For one-in-five entrepreneurs (20%) the top frustration encountered when running their business is not having enough time. Managing employees is a source of frustration for 16% of business owners. Slightly fewer business owners are frustrated by the difficulty in finding more money needed to grow their businesses or in developing all of the necessary managerial skills for running their business (both 15%).
As business owners look for ways to maximize their productivity, many rely on the Internet for assistance. Eighty-eight percent of entrepreneurs use the Internet for business activities. These activities include making travel plans (60%), purchasing goods from wholesalers (60%), and conducting market or industry research (48%). One in five male-owned businesses (19%) has established an online presence to sell products or services online compared to 16% of businesses overall and 10% of female-owned businesses. One-in-ten business owners (12%) do not use the Internet for any type of business activity.
Additional survey results are available by contacting OPEN from American Express.
The OPEN from American Express Small Business Monitor, released each spring and fall, is based on a nationally representative sample of 626 small business owners/managers of companies with fewer than 100 employees. The survey was conducted via telephone by International Communications Research from March 26-April 12, 2007. The poll has a margin of error of ±3.9%.
About OPEN from American Express®
OPEN from American Express is the team dedicated exclusively to the success of small business owners and their companies. The OPEN team supports business owners with unparalleled service. With tailored products and services, the team delivers purchasing power, flexibility, control and rewards to help customers run their business. Specifically, business owner customers can leverage an enhanced set of products, tools, services and savings, including charge and credit cards, convenient access to working capital, robust online account management capabilities and savings on business services from an expanded lineup of partners. To obtain more information about OPEN, visit OPEN.com, or call 1-800-NOW-OPEN to apply for a card or loan. Terms and conditions apply.
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