Friday, February 19, 2010

Business 2010 – A Time for Optimism and Work

Even though it has been a long haul, it’s nice to see some optimism on the horizon for 2010. Just yesterday, a new study “U.S. Small Business Outlook 2010: Lessons Learned – A Case for Greater Optimism,” was published by CIT Group, Inc., in conjunction with Forbes Insights. It shows that small business owners feel more confident and better positioned than ever.

They feel the lessons learned during the past 12-18 months have not only helped them survive, but nearly half agreed that the recession exposed flaws in their business strategies that were previously not apparent, and they could fix. Here are some areas of emphasis highlighted:
  • Better cash flow controls. Obviously, falling income over the past two years put additional pressure on small business cash flow. Some companies turned to cutbacks over boosting financial reserves. Others focused on reducing overhead and expenses, but they needed a balanced strategy, along with new lines of credit and financing.

  • More focus on strategic planning. Small business owners recognize the importance of planning amid the new economic environment and want to spend more time doing it. Only 44% indicated they had a strategy in place during the recession, or to guide growth during the coming recovery period. More work needed.

  • Increased business role in US economic recovery. Small businesses now believe they have played a key role in the U.S. economic recovery, but in spite of, rather than assisted by, support from the federal government. Still, they are fighting for action, particularly in the area of higher Small Business Administration (SBA) loan limits.

  • Increase operating efficiencies. A majority of small business leaders intend to be more aggressive in 2010 by implementing a range of actions to advance their businesses. A full 59% of respondents cited a greater focus on operating efficiencies as the number one step to achieving growth in 2010.

  • Add new revenue streams, and more aggressive marketing. At the same time, 62% plan to invest more in marketing and advertising, while 50% will invest in expansion and 46% will pursue new revenue streams. Another approach is to diversify and broaden the product lines and services.

  • Grab market share from competitors. Seventy-eight percent of respondents acknowledged that the old way of doing business will no longer work and that they need to find new ways to take advantage of market opportunities. Many are planning to be more aggressive in grabbing market share from competitors.
A majority of the small business owners surveyed indicate greater optimism about their 2010 growth prospects, with 60% of respondents expecting their companies to grow this year. Less than a third expect their revenues to be flat and just 12% anticipate a decline.

At the same time, small business owners are still feeling the pressure of the current economic environment, with 71% agreeing that they are working harder and longer than ever before, and nearly a third indicating that the recession has made them doubt their commitment to running a small business.

My take on all this is that entrepreneurs are starting to see some light at the end of the tunnel, and the light is no longer a freight train heading straight at them. We always learn more when times are tough, and we should come away with more strength and determination, as well as real results. Soak up the optimism, shore up your seawalls, and see your ship come in.

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