By Rieva Lesonsky
How is the economy affecting small business owners’ thoughts and plans about their companies’ finances? In a recent Small Business Sentiment Survey conducted for Local Corporation, 92 percent of small business owners said the economy influences their financial decisions. Here are some of the changes small business owners have considered making as a result of the up-and-down economy of the past three years:
- 51 percent have considered reducing operating costs
- 46 percent have considered raising prices on their products or services
- 40 percent have considered reducing marketing spending
- 24 percent have thought about laying off employees
- 19 percent have contemplated cutting back their operating hours
- 16 percent have considered cutting either employee benefits or salaries
Most drastically of all, 16 percent have thought about closing their businesses either permanently (16 percent) or temporarily (11 percent). This, despite the fact that entrepreneurs are so dedicated, 61 percent have thought about taking a pay cut in order to keep their companies running.
Despite their financial uncertainties, small business owners firmly believe in the importance of investing in their businesses, with more than half (56 percent) saying they are prepared to make long-term investment in their company right now. The biggest areas where they plan to invest capital are business development (46 percent) and online advertising (37 percent).
As part of watching their finances carefully, small business owners are also seeking to get more from their advertising and marketing expenditures. As a result, more of them are turning to online advertising, which is projected to grow by $18 billion between 2010 and 2015, and fewer are using traditional media, which is projected to shrink by $5 billion from 2010 to 2015.
More than half (63 percent) of the small business owners surveyed report they are currently marketing their companies online, and 30 percent are planning to spend more on digital marketing next year. In addition, more than half (53 percent) of respondents think that launching a business website or improving their existing business website is the number-one way they could reach customers.
Have you made any of the financial changes the business owners in the survey are thinking about? How are you investing in the future of your business?
Image by Flickr user Terry Johnston (Creative Commons)Google+