By Maria Valdez Haubrich
Small business owners are facing a lot of challenges these days, but in spite of it all, they’re still optimistic, according to the results of a recent Citibank poll.
What are the biggest challenges on small business owners’ minds in 2011? Rising raw material prices (25 percent) and the increasing cost of health care (23 percent). What they’re not worried about is the impact of government policies: 40 percent expect policies to remain the same and 18 percent expect them to be more favorable in 2011.
What would be most helpful to their business this year? Respondents say reducing taxes (30 percent), lowering health-care costs (17 percent), and increasing credit availability (17 percent) would make the biggest difference.
The emphasis on finances makes sense, considering that the majority of respondents expect the costs of running their business to increase this year. According to the survey:
- 83 percent expect utility costs to rise
- 80 percent expect the cost of healthcare to increase
- 80 percent expect the cost or raw materials to rise
- 68 percent expect taxes to increase
- 60 percent expect the cost of borrowing to increase
As a result of rising costs, 45 percent plan to raise their prices; however, 55 percent do not.
Small business owners in the survey have big plans for improving their businesses in 2011. To grow their businesses, they will work longer hours (59 percent), increase marketing (52 percent) or increase employee productivity (43 percent). More than half (52 percent) also plan to offer new products or services in the coming year, and 43 percent plan to expand into new markets.
Perhaps those energetic growth plans are the reason for the overall optimism of small business owners in the survey. The majority believe 2011 will be better than (44 percent) or the same (42 percent) as 2010; just 15 percent expect it to be worse. And the number of business owners who described current conditions as excellent or good rose to 33 percent in January, up from 24 percent in September and 23 percent in March 2010.
Image by Flickr user Mykl Roventine (Creative Commons)
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