Optimism on the Rise at Small Businesses but Investments Lag, Says American Express OPEN Small Business Monitor

Business Owners Give Themselves a Salary Raise

NEW YORK--(BUSINESS WIRE)-- Small business owners are more positive about the overall economy and their own business prospects over the next six months, but their increased optimism is not translating into investments. According to the 2015 American Express OPEN Small Business Monitor, more than two thirds of business owners have a positive outlook (67%, up significantly from 54% in spring 2014). However, capital investments (56%) and hiring plans (34%) are flat compared to last year, and the top priority for entrepreneurs is “keeping/maintaining their current business and sources of revenue.”

Improving economic conditions are paying off for entrepreneurs personally. On average, business owners are paying themselves an annual salary of $73,700, up from $71,200 last fall. Entrepreneurs are also more confident about their ability to save for the retirement they want and fewer report being worried (47%, down significantly from 65% a year ago).

“Despite a positive outlook on the economy and business prospects, entrepreneurs are cautious given the slower growth of the past few years and are holding the line on business investments, reluctant to be caught without capital if the need arises,” said Denise Pickett, president, American Express OPEN. “They are however raising their own salaries, investing in themselves and paying themselves back after doing without during the recession.”

As entrepreneurs look to preserve their current business, 82 percent say they will place a heightened focus on better serving customers to set their businesses apart from competitors (up from 78%, last spring). Even with this continued focus on customers, fewer will be analyzing customer data to drive their business decisions: Just 45 percent of business owners say they analyze customer or other data for their businesses, down significantly from last year (65%). According to survey respondents, the biggest barrier to implementing data analytics is time (42%).

Growth Plans Still in the Cards, Challenges vary by State

Though it’s no longer the top priority for business owners, growth plans are still critical, as more than three quarters of business owners plan to grow their businesses over the next six months (76%, up from 72% last year). Construction is the leading sector with growth plans (91%) followed by manufacturing (86%) and retail (85%). The primary way business owners plan to grow overall is by selling more of the same products or services (32%), though they cite the rising costs of doing business as the biggest challenge to growth (22%). Growth challenge breakouts by geography include:

• Business owners in Florida are most concerned about government regulations (29%)

• Among California business owners, the rising costs of doing business is the biggest concern (27%)

• Being too busy satisfying existing business to find new customers is the greatest challenge for business owners in Illinois (28%)

• Business owners in Texas are most concerned about finding the right staff in (24%)

• The uncertain economy presents the greatest challenge for business owners in New York (21%)

Additional survey results including findings by industry and geography are available by contacting Alex Della Rocca at 212-539-3203 or [email protected].

Survey Methodology

American Express OPEN Small Business Monitor, conducted since 2002, is based on a nationally representative sample of 742 U.S. small business owners/managers of companies with fewer than 100 employees. The anonymous survey was conducted via telephone by Ebiquity February 17-March 3, 2015. The poll has a margin of error of +/- 3.6% at the 95% level of confidence.

About American Express OPEN

American Express OPEN is the leading payment card issuer for small businesses in the United States and supports business owners and entrepreneurs with products and services to help them run and grow their businesses. This includes business charge and credit cards that deliver purchasing power, flexibility, rewards, savings on business services from an expanded lineup of partners and online tools and services designed to help improve profitability. Learn more at www.OPEN.com and connect with us at openforum.com and twitter.com/openforum.

American Express is a global services company, providing customers with access to products, insights and experiences that enrich lives and build business success. Learn more at americanexpress.com and connect with us on facebook.com/americanexpress, foursquare.com/americanexpress, linkedin.com/company/american-express, twitter.com/americanexpress, and youtube.com/americanexpress.

Key links to products and services: charge and credit cards, business credit cards, travel services, gift cards, prepaid cards, merchant services, business travel, and corporate card.

M Booth
Alex Della Rocca, 212-539-3203
[email protected]

Source: American Express OPEN

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