SAN FRANCISCO - January 26, 2011
According to the latest Wells Fargo/Gallup Small Business Index survey, conducted in November 2010, 57 percent of business owners surveyed say they plan to make changes in 2011, with 43 percent saying they plan to expand their business operations. Of those respondents who are looking to expand, 56 percent say they intend to add employees.
Hiring continues to be a focus for business owners. Looking back at 2010, 51 percent of business owners with paid employees say that they hired new employees. Forty-one percent of those business owners who hired did so to replace an employee who left; another 21 percent were hired to support growth or expansion plans. Of the business owners who hired in 2010, 42 percent say they hired fewer new employees than they needed. Business owners foresee a somewhat better employment outlook in 2011: 18 percent say they expect hiring to increase at their companies over the next 12 months, up from 13 percent in Q3 2010.
Mary Canales, owner of Ici Ice Cream in Berkeley, CA, is one such entrepreneur. “When expansion or marketing opportunities arise, we always look to the original mission defined in our business plan. Other aspects of our plan may change, but growing slowly and thoughtfully with the mission in mind is fundamental,” says Canales. Ici Ice Cream currently employs a staff of 36 in Berkeley and hopes to hire another manager. “Building a bigger kitchen and adding management help will give me more time to pursue opportunities that fit my original business idea.”
Compared to the same survey questions asked in 2008, this quarter’s Index shows some additional signs of optimism. Business owners surveyed in 2008 were bracing for the worst: cutting operating costs was a key focus, indicated by 79 percent as a very high or high priority. This year, while cost cutting remains a top concern (64 percent), other more forward-looking priorities have gained ground, including being more involved in communities (43 percent), planning a succession strategy (42 percent), and increasing advertising and public relations (40 percent). Using social media and increasing investments in technology are also cited as high priorities by approximately a third of those surveyed.
Business owners also responded with their key concerns for 2011. The most pressing concern was retirement and succession planning, with 64 percent saying they worry about putting enough money away. However, 57 percent indicated that saving for retirement is actually a low priority for the coming year – evidence that many business owners may still be facing considerable financial stress.
“Business owners continue to focus on their financial health and appear to be heading into 2011 with cautious optimism about business growth prospects,” said Doug Case, Wells Fargo Small Business Segment Manager. “Wells Fargo is committed to providing knowledgeable bankers and educational resources to help owners navigate the changing business environment and take advantage of new opportunities.”
About the Small Business Index
Since August 2003, the Wells Fargo/Gallup Small Business Index has surveyed small business owners on current and future perceptions of their business financial situation. The Index consists of two dimensions: 1) Owners’ ratings of the current situation of their businesses and, 2) Owners’ ratings of how they expect their businesses to perform over the next 12 months. Results are based on telephone interviews with 604 small business owners in all 50 United States conducted November 4-10. The overall Small Business Index is computed using a formula that scores and sums the answers to 12 questions — six about the present situation and six about the future. An Index score of zero indicates that small business owners, as a group, are neutral -- neither optimistic nor pessimistic -- about their companies’ situations. The overall Index can range from -400 (the most negative score possible) to +400 (the most positive score possible), but in practice spans a much more limited range. The margin of sampling error is +/- four percentage points.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a nationwide, diversified, community-based financial services company with $1.3 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 9,000 stores, 12,000 ATMs, the Internet (wellsfargo.com and wachovia.com), and other distribution channels across North America and internationally. With approximately 280,000 team members, Wells Fargo serves one in three households in America. Wells Fargo & Company was ranked No. 19 on Fortune’s 2009 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy all our customers’ financial needs and help them succeed financially.
Wells Fargo is America’s #1 small business lender (2009 Community Reinvestment Act government data) and a leading lender to women- and diverse-owned businesses. With the nation’s largest network of retail banking stores, and an award-winning online Business Insight Series (www.wellsfargobusinessinsights.com) including videos, webcasts and articles, Wells Fargo provides business owners with timely advice and information to educate and help them succeed financially. For more information, or to speak with a Wells Fargo banker, visit wellsfargo.com/biz or call the National Business Banking Center at 1-800-CALL-WELLS.
For more than 70 years, Gallup has been a recognized leader in the measurement and analysis of people’s attitudes, opinions and behavior. While best known for the Gallup Poll, founded in 1935, Gallup’s current activities consist largely of providing marketing and management research, advisory services and education to the world’s largest corporations and institutions.
Note: Complete survey results available upon request.