NEW YORK--(BUSINESS WIRE)--More small business owners say business conditions are good or excellent today than at any point in years, according to the latest Citibank® Small Business Pulse released today. Nearly half of small business owners (48%) rate conditions as good or excellent, up from 43% in May 2012 and twice the rate three years ago (24%). Current confidence also represents a rebound from August 2012, when the fiscal cliff caused uncertainty.
“As conditions improve, many small businesses are planning to add staff despite some still reporting a ‘skills gap’ in the US”
Meanwhile, those that say conditions are poor dropped to 14%, the lowest level since the Citibank® Small Business Pulse began in 2010. Half of small business owners say they expect annual sales to grow in 2013, with one-third saying they will grow by more than 10%. In addition, more than half (54%) expect an even stronger 2014.
“The rise in those that have a favorable view of current business conditions is unmistakable,” said Jerome Byers, head of Citibank Small Business. “While about half still fault sales for preventing them from achieving business goals, just as many business owners project improved sales this year and next. In recent years, as conditions have improved and small businesses have looked to grow, we have sought to be there for them – our small business lending has grown annually, from $4.5 billion in 2009 to $9.6 billion last year.”
IMPROVED OUTLOOK COINCIDES WITH PLANS FOR GROWTH
With the change in outlook, 26% of business owners say they will hire full-time employees in the next 12 months, significantly higher than found in most Citi Pulse surveys conducted over the past three years (15% in Summer 2012 and 17% in Summers 2011 and 2010). Only 5% of all respondents are considering a staff reduction.
Meanwhile, 13% say they are looking to add a new location. Among those companies, 25% intend to grow internationally to either an emerging or a major international market. Eighty-one percent see a new geographical market as a sales solution or business opportunity that does not exist in the current market. Among companies not expanding, 26% say they do not have the right staff to manage expansion.
Aiding owners’ interest in growth, their fears about cash and budgets have eased – 59% are achieving or making progress toward maintaining their cash flow, compared to the 50% who had reported facing a cash crunch by the summer of 2012. Owners are also focusing on reducing debt – 39% are paying off debt while another 22% are making progress toward a full payoff.
THE NEED FOR SKILLS
Some small businesses would like to hire, but cannot find qualified candidates (16%). Among these companies, 62% say candidates need more experience and 44% cannot find skilled labor. The number one item on the action plan for all companies to achieve business goals is training employees, followed by reinventing marketing/advertising and incorporating innovative technology. Company size makes the focus on training easier, chosen by 59% of companies with sales revenue greater than $1 million, compared to 37% of companies under $1 million.
“As conditions improve, many small businesses are planning to add staff despite some still reporting a ‘skills gap’ in the US,” said Byers. “Plans for physical expansion are in the works too, including the possibility of small businesses crossing international borders – and well they should. With global services and resources to support them, no business is too small to consider international options to find suppliers or customers.”
BUSINESS OWNERS STILL SACRIFICE, BUT LESS
This year, many small business owners reported making fewer personal sacrifices to keep their businesses going and growing – 64% took less profit to support the business versus 78% last year. This year, 54% covered several jobs because they could not afford to hire additional employees, while 67% were forced to cover more roles last year. Some small business owners (17%) borrowed from pension and retirement funds, almost a third of whom (31%) are 55 years and older.
WHEN BUSINESS GETS PERSONAL
Thirty-three percent of small business owners say they mix personal and business finances, 42% of whom use personal credit accounts for their business. In a nod to stronger business situations, 62% of small business owners said they used personal savings to fund their business in 2012, yet only 37% dipped into their own pockets in 2013.
Demonstrating the passion and commitment of small business owners, 22% do not ever plan to retire unless they are no longer able to work. For those who plan to retire, 40% expect to sell the business.
About the Citibank® Small Business Pulse
This Citibank survey was conducted via telephone from May 16, 2013 – May 30, 2013 by Abt SRBI Research and Public Affairs among a national random sample of 750 small business owners/operators, age 18 and older throughout the United States. The margin of error for the national sample is approximately +/- 3.58%. Surveys are subject to other error sources as well, including sampling coverage error, recording error, and respondent error.
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