Small Business Owners Optimistic about Growth Despite Growing Challenges, According to CAN Capital Index Consumer Trends, Big Business and Access to Capital Could Thwart Efforts
NEW YORK, July 15, 2014 /PRNewswire/ -- Sixty-One percent of small business owners expect business growth within the next 12 months according to CAN Capital, Inc., the market share leader in alternative small business finance. This finding is part of CAN Capital's inaugural Small Business Health Index, powered by SurveyMonkey™. The Index taps into key issues and trends that can help business owners across the country to expand and grow their businesses. The data also revealed some of the challenges facing small businesses, including leveraging the right advertising and marketing strategies, attracting and retaining talent, battling big-box retailers and accessing capital.
"We're seeing some inconsistency in small business owner reaction from other third-party research around industry optimism in the news, but our Index and customer data show a positive trend when it comes to growth, suggesting small businesses are feeling confident in accessing working capital to expand, purchase equipment and make other improvements," said Daniel DeMeo, Chief Executive Officer, CAN Capital. "CAN Capital's goal with the Small Business Health Index is not only to identify some of the challenges and opportunities for small businesses, but to hopefully provide some education and support to them when it comes to different facets of running their business."
Priming the Pump for Growth
Survey data shows that small businesses are preparing for growth with almost a third (31 percent) looking to expand and/or try new forms of advertising/marketing activities (such as online ads, email marketing, etc.). Over one quarter (26 percent) of small business owners plan to purchase equipment and/or make inventory investments over the next year. CAN Capital's own customer data corroborates this trend, as in the first half of the year it has provided access to working capital to about 10,000 unique customers that sought out working capital to invest in their businesses. In 2014 to date, this has equaled almost half a billion in funding.
"The CAN Capital Small Business Health Index, powered by SurveyMonkey, was created to help small businesses make wiser decisions that can positively affect their profitability and growth, a mission that our two companies certainly share," said David Goldberg, Chief Executive Officer, SurveyMonkey. "We were excited to partner with CAN Capital to create this resource from which small businesses can benefit."
Changes and Challenges
In terms of changes and challenges affecting small businesses, the Affordable Care Act was named as one regulation that small business owners (33 percent) said had/will have an effect on their businesses, though it's not clear if that effect has been positive or negative. Thirty-seven percent of small business owners view the ability to offer competitive prices as their biggest challenge when competing with big businesses, with ability to offer competitive benefits for employees coming in second at 18 percent. In terms of potential threats, thirty-four percent of small business owners shared that the biggest threat to small businesses today is rising employment costs. This trend also impacts hiring, with 31 percent of small business owners saying that the greatest hiring obstacle is being able to offer a competitive salary, followed by the ability to offer an attractive health insurance/benefits package (29 percent).
Capitalizing on Capital
Forty-five percent of small business owners surveyed anticipate needing external capital to run their small business in the next year. However, 65 percent of them say that gaining access to working capital is quite or extremely challenging. While 30 percent of small business owners say that the easiest way to obtain funding/working capital is applying for a bank loan, more of them (40 percent) have actually been more successful in securing funding/working capital from friends and/or family than from a bank (27 percent).
DeMeo added, "It's interesting, but not surprising, to see that small businesses still perceive the traditional bank loan process as the easiest way to access capital, but in reality, they're not actually seeing that funding and are going to friends and family instead. One of our goals at CAN Capital for the remainder of the year is to help raise awareness to small business owners that there are other legitimate alternatives available to them for their capital needs."
Other key consumer and marketing trends from the study affecting small businesses include:
- Mobile and/or online business reviews are the number one consumer trend that small business owners (44 percent) say will have an impact on their business. A valid point as according to research from LocalVox – a New York City-based company that focuses on leveraging online marketing to drive in-store sales for franchises, large-multi-location businesses and small businesses – restaurants with 3.5 stars on Yelp are 63 percent more likely to be full than those with just three stars. This means that a half-star difference translates to a 5-19 percent increase in revenue.
- Online shopping came in second as the other top consumer trend that small business owners (34 percent) say will have an impact on their business.
- Interestingly, a plurality of respondents (41 percent), have not optimized their business website for all mobile devices. LocalVox research shows that 88 percent of consumers who search for a type of local business on a mobile device call or go to that business within 24 hours, which underscores how critical it is for small businesses to ensure they're appealing to customers via mobile.
Small business education will also be a main focus for CAN Capital for the second half of the year with a series of initiatives being offered to small businesses including the company's Master Class series, which leverages small business experts with a range of expertise to give informative webinars on topics of interest to small business owners. The most recent Master Class featured small business columnist Gene Marks and was on Leveraging the Power of Digital Marketing to Grow Your Business.
Learn more about the CAN Capital Small Business Health Index, powered by SurveyMonkey by visiting www.cancapital.com.
Note to Editors
The CAN Capital Small Business Health Index, powered by SurveyMonkey is an index measuring small business owners' sentiment about economic, business and consumer trends as well as other factors such as access to capital, growth and competition.
CAN Capital conducted an online study of small business owners using a combination of respondents from SurveyMonkey Audience, SurveyMonkey's targeted market research panel, and CAN Capital's own small business owner database. The study was conducted between June 12 and June 30, 2014 and respondents included small business owners from across the United States. Percentages are based on 727 responses.
About CAN Capital
CAN Capital, Inc., established in 1998, is the pioneer and market share leader in alternative small business finance, having provided access to $4 billion in capital for tens of thousands of small businesses in a wide range of locations and different business types.
As a technology-powered financial services provider, CAN Capital uses innovative and proprietary risk models combined with daily performance data to evaluate business performance and facilitate access to capital for entrepreneurs in a fast and efficient way. Its business evaluation model allows it to help small businesses qualify for more money than they could obtain elsewhere.
CAN Capital makes capital available to businesses through its subsidiaries: Merchant Cash Advances by CAN Capital Merchant Services, Inc., and business loans through CAN Capital Asset Servicing, Inc. (CCAS). All business loans obtained through CCAS are made by WebBank, a Utah-chartered Industrial Bank, member FDIC.
SurveyMonkey is the world's leading online survey platform, with more than 2 million survey responses every day. SurveyMonkey has revolutionized the way people give and take feedback, making it accessible, simple and affordable for everyone. The company was founded in 1999 with a focus on helping people make better decisions, and has built technology based on over 10 years of experience in survey methodology and web development. Customers include 99% of the Fortune 500, academic institutions, organizations and neighborhood soccer leagues everywhere.
The company has more than 275 employees worldwide with headquarters in Palo Alto, CA. For more information, visit www.surveymonkey.com.
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SOURCE CAN Capital, Inc.