Sixty-six percent of business owners expect a flat economy for 2012. While this sounds dismal at first blush, the number of small businesses expecting a recession year dropped by half, from 30 to 14 percent. In addition, 20 percent of business owners expect an expansion, nearly doubling from 12 percent.
Small businesses are experiencing revenue growth as well – 46 percent respondents reported increased revenue, up from 39 percent. Additionally, 31 percent reported decreases in revenue, down from 37 percent. While job growth remains the same, says the report, only 23 percent reported job decreases – the lowest number in three years.
Meanwhile, when asked which issues affect small business owners the most, 44 percent ranked the national deficit No. 1, up to 46 percent from 34 percent. Reducing tax and regulation burdens and bringing down the cost of healthcare ranked No. 2 and No. 3 respectively. Forty percent of small business numbers feel burdened by regulatory measures and consider them a major challenge, an 11-percent increase.
In other news, the ADP announced this week that their projections of a national job growth of 170,000 for January were in large part spurred by small business growth. According to their report, businesses with under $50 million added 95,000 jobs, and 72,000 of those jobs came from medium-sized businesses, defined as making between $51 million and $499 million. As far as large companies? Only 3,000 were created in January, the ADP projects.
Today, the Labor Department announced that 243,000 jobs were added in January and the unemployment rate has dropped in 8.3 percent, a drop for the fifth straight month and the lowest in the year. Stocks surged in response to the news, the Dow jumping 157 points and the NASDAQ composite index closing at its highest level since the end of 2000.
Small businesses aren’t scaring easily in 2012 if a recent National Small Business Association report is any indication. Today it released its 2011 Year-End Economic Report, revealing that more business owners are optimistic about their future. The number of those more confident rose from 64 percent to 75 percent in six months and is the highest percentage reported in three years. Sixty-six percent of business owners expect a flat economy for 2012. While this sounds dismal at first blush, the number of small businesses expecting a recession year dropped by half, from 30 to 14 percent. In addition, 20 percent of business owners expect an expansion, nearly doubling from 12 percent.
Small businesses are experiencing revenue growth as well – 46 percent respondents reported increased revenue, up from 39 percent. Additionally, 31 percent reported decreases in revenue, down from 37 percent. While job growth remains the same, says the report, only 23 percent reported job decreases – the lowest number in three years. Meanwhile, when asked which issues affect small business owners the most, 44 percent ranked the national deficit No. 1, up to 46 percent from 34 percent. Reducing tax and regulation burdens and bringing down the cost of healthcare ranked No. 2 and No. 3 respectively. Forty percent of small business numbers feel burdened by regulatory measures and consider them a major challenge, an 11-percent increase.
In other news, the ADP announced this week that their projections of a national job growth of 170,000 for January were in large part spurred by small business growth. According to their report, businesses with under $50 million added 95,000 jobs, and 72,000 of those jobs came from medium-sized businesses, defined as making between $51 million and $499 million. As far as large companies? Only 3,000 were created in January, the ADP projects.
Today, the Labor Department announced that 243,000 jobs were added in January and the unemployment rate has dropped in 8.3 percent, a drop for the fifth straight month and the lowest in the year. Stocks surged in response to the news, the Dow jumping 157 points and the NASDAQ composite index closing at its highest level since the end of 2000.
]]>Contributions for this fund will come primarily from Citigroup (at $25 million), with the nonprofit Enterprise Community Partners (known for their nationwide support of affordable housing) contributing $2.5 million, and Next Street and a group of wealthy investors rounding out the balance. However, loan assets will be distributed by Next Street, who has a 6 year history of working with small businesses in New York and Boston.
To qualify for an Opportunity Fund loan, small businesses are expected to have between $3 million and $60 million in annual revenue, to have been in business for a minimum of 5 to 7 years, and to be poised for imminent growth. Borrowers are required to retain Next Street as a consultant to offset the lender risk, which will provide a strategic piece to help that company take maximum advantage of the capital they’ve borrowed and drive sustained growth. Loan amounts are expected to range from $1.5 million to $2 million, with repayment terms extending anywhere from 5 to 7 years. It’s important to note that this is not a program intended to facilitate recovery for troubled companies but rather to stimulate expansion for up-and-coming ones.
What makes this program unique is that loans will be distributed based on growth potential rather than past performance, thereby targeting small businesses with the potential for rapid growth. In addition, the Next Street consultancy requirement provides direction for those loan recipients, thus blending high-level strategic business advice with the growth capital needed to implement those strategies and put them to work.
References
Mandelbaum, Robb. “ Citibank Tries a New Approach to Small-Business Lending.” The New York Times. 2/2/12. (2/2/12.) http://boss.blogs.nytimes.com/2012/02/02/citibank-tries-a-new-approach-to-small-business-lending/?ref=smallbusiness.
Resources for Entrepreneurs. “Citi Teams Up with Next Street to Create $30M Small Business Lending Fund.” Gaebler.com. 2/3/12. (2/3/12.) http://www.gaebler.com/News/Small-Business-Finance/Citi-teams-up-with-Next-Street-to-create-$30m-small-business-lending-fund-900000073.htm.
Zimmerman, Eilene. “Next Street, Citi Create $30M Small-Biz Loan Fund.” Crain’s New York. 2/2/12. (2/2/12.) http://www.crainsnewyork.com/article/20120202/SMALLBIZ/120209975.
]]>The Flexible Term Lending Program, available for small business owners in multiple industries including retail, wholesale and manufacturing, offers loans from $50,000 to $5 million with 7 to 25 year terms. Loan terms will depend on the purpose of the loan (e.g. working capital, business acquisitions or for machinery/equipment purposes). This type of small business loan includes a floating interest rate up to 2.75 percent and no balloon payments.
The Fixed/Floating Rate Program offers various loan amounts which are determined based on the use of the proceeds. This loan program also uses no balloon payment structures. Interest rates are calculated and fixed according to market rates. Loan qualifications include a 10 percent equity contribution, and if any owners own more than 20 percent of the business a personal guarantee will be needed.
For both the Flexible Term Lending Program and the Fixed/Floating Rate Program all qualifying small businesses must be for-profit, owned by a U.S. citizen or resident alien and the business must be located in the United States. Some small businesses may not be eligible for the loans due to specific business involvements (e.g. investment real estate, religion or politics).
The Conventional Real Estate Loan Program is designed to provide finance for commercial real estate businesses. The loan may be awarded to businesses that are purchasing, renovating or expanding commercial real estate, and the loan may be used to refinance existing commercial real estate loans. Loan terms will depend on whether or not the property is an investor property or an owner occupied property.
The loans, which are available through the Small Business Authority, may provide much needed assistance for small business owners struggling to obtain capital in an atmosphere of tightened credit during a downturned economy.
References
Small Business Authority. “3 Important Loan Programs for Small Business Owners.” Forbes. 2/3/2012. http://www.forbes.com/sites/thesba/2012/02/03/3-important-loan-programs-for-small-business-owners/
]]>Findings from the GDP report include:
From 1998 to 2001, the small business share of GDP held steady at around 50% and only experienced slight downward trends.
After 2001, the small business share of GDP experienced a decline from just over 48% in 2002 down to 46% in 2008.
Data which is still being compiled for the 2009 – 2010 time period suggests that a further decline in small business GDP occurred. This data also indicates that larger businesses (with over 500 employees) experienced a quicker economic recovery while small businesses experienced a continuing decline in GDP share during 2010.
The construction industry in particular, which is largely composed of small businesses, has experienced a significant decline due to the effects of the downturned economy. The small business share of the construction industry shrunk from 88% in 1998 to approximately 84% in 2008.
Additional decreases in small businesses share of employment occurred in industries which include: wholesale trade, retail trade, transportation/warehousing and real estate.
However, even though the initial report may seem to underscore the effects of the recent recession on small businesses, positive conclusions were also revealed in the report’s highlights.
Throughout the last half of 2010, small businesses experienced the same net job gains as larger businesses. The gross job gains of small business during the latter half of 2010 surpassed the gross job gains of large businesses by 3 to 1.
While the construction industry has continued to affect the GDP share of small businesses, the health care industry has continued to increase its shares in the economy. Health care and social services which accounted for 7.2% of the U.S. economy in 1998 have grown to almost 9% of the total U.S. economy.
Because small businesses account for approximately 50% of the health care industry, the increase in health care economies can help to reduce the impact of employment losses in other small business sectors. From 1998 to 2008, small businesses also increased their share of employment in additional industries which include utilities and manufacturing/mining.
References:
Kobe, Kathryn. (January 2012). Small Business GDP: Update 2002 – 2012. Retrieved from http://www.sba.gov/sites/default/files/rs390tot_1.pdf.
U.S. Small Business Administration. “Small Business GDP: Update 2002-2010” Research Summary by Kathryn Kobe. (2012) http://www.sba.gov/advocacy/7540/42371
Tozzi, John. “Small Business Share of Economy, Job Growth Shrinks.” Bloomberg Businessweek. 1/31/2010. http://www.businessweek.com/smallbiz/running_small_business/archives/2012/01/small_business_share_of_economy_job_growth_shrinks.html
]]>However, as the report points out, lenders have remained tight on credit standards, keeping loan terms relatively the same throughout this period, although there has been an easing in both pricing and terms of the loans. Along these same lines, for most banks caps on credit lines and requirements for collateral remained the same as well. Essentially, what this means is that for many small businesses in America, securing a loan can still be quite difficult.
In fact, business experts suggest that these numbers may be meaningless, as most small businesses earn a yearly revenue of $1 million or less (compared to the Fed’s $50 million per year cut-off). This discrepancy in annual revenue indeed calls into question how many of those businesses securing lending in the fourth quarter of 2011 can truly be termed “small.”
Interestingly, U.S. banks reported little changes in commercial real estate lending standards, with only a moderate percentage reporting an increase in demand. Other general findings outlined in the Federal Reserve report include an increase in demand for credit card financing and auto loans during the fourth quarter, with lending standards and demands for residential real estate loans remaining relatively unchanged.
References
Burns, Adrian. “Loan Officer Survey: Demand Up but Lending Picture Still Bleak.” Nashville Business Journal. 2/2/12. (2/2/12.) http://www.bizjournals.com/nashville/news/2012/02/02/loan-officer-survey-demand-up-but.html.
Federal Reserve Board. “The January 2012 Senior Loan Officer Opinion Survey on Bank Lending Practices.” 1/30/12. (1/30/12.) http://www.federalreserve.gov/boarddocs/SnloanSurvey/201201/default.htm.
Pagliery, Jose. “Small Biz Loan Demand Up, Federal Reserve Says.” CNNMoney. 2/1/12. (2/1/12.) http://money.cnn.com/2012/01/31/smallbusiness/loans/index.htm?iid=SF_SB_LN.
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According to a report published by Reuters in December of 2011, auto industry gains for the last quarter of the year may have reflected a change in the mindset of potential buyers, a trend that may in part explain the figures released yesterday. Jesse Toprak, an analyst for TrueCar.com, put it this way: "The biggest change in the consumer attitude is that a lot of consumers are now realizing this uncertainty in the market is not going to disappear completely any time soon. It's a big mind shift, which is positive for the industry."
There's encouraging news in the types of vehicles being purchased, too. Pickup truck sales were up in November. Sales of pickup trucks are regularly monitored as a bellwether of small business growth and confidence. Sales for Ford's F-Series were up 24 percent, while at GM, sales for Chevy Silverado and GMC Sierra trucks were up 31 percent.
Better than average auto industry sales may be the result of a number of factors, including an aging population of vehicles on the road and a modest increase in the trade-in value of used cars. As a portion of overall U.S. consumer spending, long-term average consumer spending on vehicles has typically hovered near 6 percent. Going into November of 2011, that figure was down to 3.5 percent. Reuters terms the disparity as reflecting a "pent-up demand."
John Humphrey, the senior vice president of global automotive operations at J.D. Powers said in a recent press release: “Vehicles are currently remaining on dealer lots for fewer than 50 days on average, which is the lowest level for January for the past several years. This is a good indication that pent-up demand is beginning to return to the market.” As reported by Automotive News, U.S. auto sales rose 11 percent in January.
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References
Bunkley, Nick . "In a Surprise, Car Sales Start New Year Strongly." The New York Times. 2/1/12. (2/1/12). http://www.nytimes.com/2012/02/02/business/chrysler-and-ford-car-sales-improve.html?_r=1&ref=business
Horwich, Jeff. "Ford, Chrysler gain despite Weak Economy." 7/26/11. (2/1/12). http://www.marketplace.org/topics/business/ford-chrysler-gain-despite-weak-economy
Padgett, Marty. "January 2012 Car Sales Are Strong--Except At GM." 2/1/12. (2/1/12). http://www.thecarconnection.com/news/1072422_january-2012-car-sales-are-strong--except-at-gm
Woodall, Bernie and Deepa Seetharaman. "Auto Sales Rise to Near ATwo-year High." 12/1/11. Reuters. (2/1/12). http://www.reuters.com/article/2011/12/02/us-autos-sales-idUSTRE7B01Q120111202
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In the vast world of advertising, it is much more important to receive a few visitors who make a purchase than many “unique visitors” who simply click on your website but fail to take further action. Local visitors (those in your market) who are likely to benefit from your products and services are the types of consumers you want to draw. However, according to Borrell Associates, about 30 percent of a local website’s visitors do not even live in the market, and about one-fourth of a site’s page views are delivered to users who likely will not return for another year, if ever2.
Oddly enough, one of the main causes of inaccurate unique visitor counts is lost, blocked, or deleted cookies. Research has shown that after just four weeks almost one-third of tracking cookies are missing, which means a visitor will be incorrectly considered “unique” if he or she visits the same website during that period3. Unfortunately, the longer the period, the more likely this cookie loss is to occur.
Considering that nearly one-third of Americans now owns a smartphone with Internet access, browsing the Web for local products and services is easier than ever4. However, this also means that more Americans can access the Web with different devices, which causes inaccuracy with unique visitor counts. For example, consider the following scenario:
You and your spouse decide to plan your next vacation and use your computer at home to bookmark a list of links. Unable to decide which destination you like most, you email the list of websites to your office and continue browsing at work the next day and again on your smartphone on your break. The following day, you resume your search at your friend’s house, where you seek a second opinion.
While it may seem extensive, this scenario is actually very common, especially if you are considering a costly purchase like a vacation abroad. Moreover, even if you end up booking your vacation from one of the websites you bookmarked, you appear as a unique visitor on the website each time you use a different device.
As the online industry has matured significantly in recent years, it has become extremely important for consumers to be able to find your business easily. SuperMedia not only helps you target prospective, long-term customers, but also obtain local visitors that are truly interested in your products and services. While understanding the browsing habits of unique visitors is definitely an important factor in achieving these goals, simply relying on unique visitor counts alone to obtain the right types of customers is ultimately a waste of both advertising dollars and energy.
12011 Borrell Associates
2Borrell Associates Visitor Estimates Summary: February 2011
3http://www.advanced-web-metrics.com/blog/2009/02/11/why-counting-uniques-is-meaningless/
4http://www.pointinside.com/blog/2011/02/role-of-apps-and-advertising/
]]>Current immigration laws make it difficult for foreign entrepreneurs to come to the U.S. and establish small businesses, thereby contributing to the nation’s growth. The Chamber of Commerce recommends instead that the Department of Homeland Security create more business-friendly policies and cut the red tape, making it substantially easier for immigrant entrepreneurs to make the move. Other proposals include seeding and promoting entrepreneurship programs, creating the separate visa category mentioned above, and easing the process by which foreign students with desirable skills are able to come to the U.S. to study and remain here after graduation.
This latest report follows a late November House vote (The Fairness for High-Skilled Immigrants Act of 2011) that ended per-country caps of worker-based immigration visa. As the law stood before the vote, no country could receive more than 7% of the total employment-based immigration visas—a cap meant to ensure diversity but that inadvertently made it difficult for American technology firms to hire workers from big countries like India and China.
References:
Abrams, Jim. “House Votes to End Country Limits for Work Visas, Could Allow Immigrants to Stay Longer.” Lubbock Avalanche-Journal.” 11/30/11. (11/30/11). http://lubbockonline.com/filed-online/2011-11-30/house-votes-end-country-limits-work-visas-could-allow-immigrants-stay-longer#.TylxAm87WAg.
McQuillen, William. “Eased Immigration Laws May Spur Growth, U.S. Chamber Report Says.” Bloomberg Businessweek. 1/25/12. (1/30/12). http://www.businessweek.com/news/2012-01-30/eased-immigration-laws-may-spur-growth-u-s-chamber-report-says.html.
U.S. Chamber of Commerce. “U.S. Chamber and IPC Release Report on Critical Role of Immigrant Entrepreneurs to the U.S. Economy.” 1/25/12. (1/25/12). http://www.uschamber.com/press/releases/2012/january/us-chamber-and-ipc-release-report-critical-role-immigrant-entrepreneurs-.
]]>After six years as a Google AdWords Reseller Partner, SuperMedia has become one of Google AdWords’ Premier SMB Partners, Google’s most prestigious partner affiliation. Media Consultants will be able to identify SuperMedia as a Premier SMB Partner affiliate when talking to their clients about how Google AdWords are used as part of the overall Superpages Network.
As a Premier SMB Partner, SuperMedia has been recognized as one of the best in helping SMBs optimize their campaigns and in providing transparent reporting. We provide continuous support on our Search Engine Marketing products. The designation also recognizes the mutually effective communications and shared quality standards and values that have enabled Google and SuperMedia to establish a strong business partnership.
SuperMedia has reached this elite status with Google by passing stringent requirements from Google to participate in this program. By buying with SuperMedia, customers will get a higher level of service because of the additional training we receive, more effective account management and better advertiser reporting.
SuperMedia joins other Google AdWords Premier SMB Partners Cobalt, Dealer.com, Dex One, Driven Local, Hearst, Local Search Traffic, Moore & Scarry, OrangeSoda, ReachLocal, Scripps, TopSpot Internet Marketing, Web.com and Yellowbook.
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Media Relations Contacts:
Andrew Shane
(972) 453-6473
andrew.shane@supermedia.com
The study also found these brand websites are being underutilized for building consumer loyalty and interest in a store's products, and the study found that 64 percent of the top brands generate less than 100,000 visitors per month. The researchers think that personalizing online content can significantly improve in-store purchases for any company, large or small, and this study helps prove this theory.
The study found that there are different needs for demographic and psychographic shopping experiences, and that shoppers with coupons have different experiences than those looking for overall brand information, something that can enhance a user's experience on a website.
The study, entitled, “Are Your CPG Brands Maximizing the Return on Your Digital Investment?” was based on data taken from a panel of one million U.S. Internet users, whose online activity and retail purchasing behavior was tracked. This data found that online visitors to brand websites also spent 53 percent more in the CPG category than non-visitors.
Researchers expect that e-commerce will be more clearly addressed in the next wave of CPG research, which will include how different digital touch points control online buying. Currently, the CPG area has been slow to embrace e-commerce, but that has been changing.
When meeting with major CPG brands around the country, many have questions about e-commerce, and how they can build out sites themselves, or partner with large brands such as Amazon, who are successful at online marketing.
This research demonstrates that targeted digital marketing can have an impact on CPG buying behavior, and so, the interest in e-commerce in this sector can be expected to quickly grow in the future.
References:
Study: CPG website visits boost in-store sales
Alex Palmer, January 30, 2012 http://www.dmnews.com/study-cpg-website-visits-boost-in-store-sales/article/225375/
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