Small business owners must improve productivity and differentiate their businesses to overcome continuing economic challenges and compete with larger companies, according to a new survey.
This is a key conclusion of The Guardian Life Small Business Research Institute, New York, which has identified six trends that small business owners are likely to face in 2012. The institute extrapolated many of the trends from research the organization fielded in October 2011, which surveyed nearly 1,100 business owners of various sizes.
In addition to identifying critical issues for small business owners in 2012, The Institute outlined six actions owners can take to prepare for likely challenges in the coming year. Among them:
Develop and deploy integrated action plans. A short-term plan is most likely to succeed, the survey says, if it is part of a comprehensive, proactive long-term planning process.
The Institute’s research found that 4 in 10 small business owners (44 percent) believe that the economy is the “one thing that stands between where you are today and growing your company.”
Consider where borrowed money can do the most for one’s business. In considering the cost of debt, business owners responding to the Institute’s survey offered the following priorities relative to borrowing money to fund their operations: upgrading equipment (91.2%); short-term cash flow (81.3%); investing in marketing (78%); and adding people (60.7%).
Improve productivity. A difficult economy presents an opportunity to right-size a company for long-term success, the survey says. Small business owners should ensure they have the right people in the right positions so they can focus on growing the business.
According to Institute data, 14% (or one in seven) of small business owners surveyed said they would probably close down their companies were revenues to drop drastically over the next 12 to 24 months. For sole proprietors, the figure increases to 23.3%.