Small US Businesses Bullish on Growth
New survey shows firms are ''keeping their eyes on the basics''
NEW YORK, New York - 10/20/04 - US small business owners and executives are maintaining a positive outlook for business growth "despite an uneven economic recovery, heightened government regulation, slower-than-expected business spending, and higher oil prices," according to the results of a recent nationwide survey conducted jointly by the CIT Group Inc. and Business Week Research Services.
The 2004 Small Business Outlook survey concluded most US small business owners were taking a more measured approach to growing their business, but, while "acutely aware of the dangers that come with rapid expansion," are more focused on business basics, such as hiring, managing healthcare, investing in new technologies and financing their growth.
The semi-annual survey, which focuses on how small companies view the process of growing their businesses, identified three main areas of confidence in the small business marketplace: near future revenues; return on investment (ROI); and steady increases in technology spending.
The results of the survey showed that 28% of respondents expect sales to increase between 10-20% in 2004, compared to 25% in the April survey, while 79% of respondents consider the current climate a good time to invest in their businesses, slightly lower than the 85% level cited in the earlier survey.
While investment in technology may be down in certain sectors of the US economy, it said, small business owners continue to cite technology spending as a number one priority with 60% of respondents expecting to increase technology spending and investment, compared to 47% in April.
Growth does have a cost, according to the survey, and in some areas these costs are fast becoming a disproportionate burden.
Many small business owners felt that the costs associated with The Sarbanes-Oxley Act and related government regulations have an impact on small businesses.
Sarbanes- Oxley, enacted in 2002 and administered by the Securities and Exchange Commission (SEC), specifies a set of guidelines for how companies report and control their financial records.
Twenty-six percent of respondents, versus 16% in April, cite the need to invest in additional resources for financial controls with 39% of respondents feel that corporate governance regulations have affected how their companies conduct business, and 30% cite government regulations as barriers to growth.
Additional inhibitors to growth, the survey said, include: health care costs (37% of respondents) and competition (42% of respondents).
In light of the upcoming November 2 presidential election, survey participants were asked which political party's policies would have a more positive impact on the US economy: 47% prefer Republican policies, while 35% prefer those of the Democratic Party and 18% are undecided.
The first phase of the survey, conducted in April, focused on companies and their need for capital.
This second phase of the survey was conducted jointly with CIT and BusinessWeek Research Services, and specifically covered how companies view the process of growing their businesses.
The survey collected responses from a sample of 448 companies nationwide with approximately 5 to 100 employees and revenues between $500,000 and $15 million.
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