In a sign that small businesses are finally emerging from the recession and looking to grow, a majority of Chicago small business owners say they are taking concrete action to expand their business in 2011, according to the latest Citibank small business survey.
When asked what steps they will take to attract more business in 2011, 66 percent of Chicago small business owners say they will increase marketing and 61 percent say they will offer new products and services. Of those who plan to do business in a larger geographic area this year (37 percent), 39 percent plan regional expansion, 24 percent plan national expansion, and 14 percent are looking toward international expansion.
Additionally, 33 percent of Chicago small business owners say they use social networking sites such as Facebook, Twitter or LinkedIn to market their business, which mirrors the survey’s national findings showing that small businesses are increasingly using social media to reach more customers.
“We are excited to see that Chicago small businesses are out of survival mode and moving into growth mode,” said Raj Seshadri, the head of Small Business Banking at Citibank. “Small businesses are the backbone of our economy, and their optimism represents a great sign for Chicago and the country.”
Business Conditions, Outlook Stabilizing
Though a majority (69 percent) continues to rate current business conditions as fair or poor, Citibank’s survey shows that Chicago small business owners clearly believe the worst is over, with 51 percent describing 2011 conditions as “steady as a rock.” Seventy-two percent say their business is better or about the same as a year ago, compared to 30 percent who say it is worse. Looking at the rest of 2011, 81 percent expect the year to be better or about the same as 2010, with only 19 percent expecting it will be worse.
Among the surveys other key findings:
- 81 percent say they would start their business again even if they knew then what they know now about the challenges they would face;
- 68 percent of respondents are likely or very likely to use a website to expand their business in 2011;
- 60 percent say they will work longer hours themselves to grow their business;
- 60 percent say the biggest benefit of owning a business is being your own boss.
Citibank’s survey found that 20 percent of Chicago small businesses plan to increase their workforce in the next 12 months, which compares to 19 percent nationally. Seventy-three percent plan to keep the same number of employees, while only 6 percent plan to reduce jobs.
When asked about wages, the majority of respondents say the compensation they pay their employees has remained the same in the past year, compared to 30 percent who have increased wages and 11 percent who cut pay. Forty-nine percent say they provide healthcare to their workforce, compared to 51 percent who say they do not.
Taxes, Healthcare, Energy Costs Pose Biggest Challenges
Of course, Chicago small businesses face many unknowns and challenges. Ninety percent of respondents say they are concerned about another economic downturn, while 81 percent say they are prepared should one occur.
When asked what would have the most negative impact on their business this year, Chicago small business owners say the increased cost of gas and energy (25 percent), the rising costs of raw materials (14 percent) and inflation (16 percent). Respondents cite reducing taxes (37 percent) and lowering the costs of healthcare (22 percent) as the most important issues to address if advising policy makers.
About the Survey
This Citibank poll was conducted via telephone by Abt SRBI from April 8 to April 21, 2011, among a national random sample of 1,004 small businesses in the United States, with revenue over $100,000 and no more than 100 employees. The design includes 200 interviews in California and 200 interviews in Chicago. The total margin of error is approximately +/- 3.1% percentage points at 95% confidence. The margin of error is higher for subgroups. Surveys are subject to other error sources as well, including sampling coverage error, recording error, and respondent error.
Citibank is a member of Citi®, the leading global financial services company, which has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Through Citicorp and Citi Holdings, Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management. Additional information may be found at www.citigroup.com.
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