Wells Fargo/Gallup Survey: small business owners cutting resources, tailoring products, running more efficiently—most say they’ve been through this before
Despite economic challenges, most of the small business owners surveyed said this is not the first time they have navigated through rough economic waters. Sixty-five percent reported having owned or operated a small business during a past economic downturn, with the majority (85 percent) saying they owned a small business during the 1990-1991 recession.
While small business owners predict no quick ending to this challenging economy (one-third of small business owners believe the economy won’t recover until 2010 or later), most reported they are adapting their business practices to deal with economic pressures. Eighty-seven percent are finding ways to be more efficient; almost three-quarters (72 percent) said they are reducing their use of gasoline and other energy; 61 percent reported they are exploring new markets, products or services; and more than half (58 percent) said they are tailoring their product, service or marketing to take advantage of the current economy.
“To deal with rising costs, I have had to shift my business model,” said Joe Talmadge, owner of San Francisco-based delivery services company, SpecialT Delivery. “I now hire drivers who use their own vehicles, significantly cutting my expenses for fuel and maintenance. I also have increased my number of bicycle messengers; this, too, has helped alleviate the rising cost of gas.”
“In this economic slowdown, small business owners are demonstrating their resourcefulness and ability to adapt to this environment by changing their business expense structures,” said Rebecca Macieira-Kaufmann, head of Wells Fargo’s small business segment. “Business owners’ resilience, along with flexible business models, strong cash flow and credit management can help ensure the financial health of a small business, regardless of the economic cycle.”
About the Small Business Index
For the last 21 quarters, the Wells Fargo/Gallup Small Business Index has surveyed small business owners on their 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. An Index score of zero reflects that an equal number of small business owners are optimistic and pessimistic about their companies’ situation. Results are based on telephone interviews with 610 small business owners nationwide conducted July 7-17, 2008. The margin of sampling error is ± 4 percentage points.
About the Gallup Organization
For more than 60 years, the Gallup Organization 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.
About Wells Fargo
Wells Fargo & Company is a diversified financial services company with $609 billion in assets, providing banking, insurance, investments, mortgage and consumer finance through almost 6,000 stores and the internet (wellsfargo.com) across North America and elsewhere internationally. Wells Fargo Bank, N.A. is the only bank in the U.S., and one of only two banks worldwide, to have the highest possible credit rating from both Moody’s Investors Service, “Aaa,” and Standard & Poor’s Ratings Services, “AAA."
Wells Fargo is America’s #1 small business lender in total dollar volume according to the most recent Community Reinvestment Act data (2006) and the #1 SBA 7a bank lender in total dollar volume. Wells Fargo has loaned more than $36 billion to women, African American, Latino and Asian business owners since 1995. For more information, speak with a Wells Fargo banker, visit wellsfargo.com/biz or call the National Business Banking Center at 1-800-CALL-WELLS.