Network Solutions and the Center for Excellence at the University of Maryland’s Smith School of Business just recently released their Small Business Success Index survey, shedding some light on the current state of entrepreneurs and the small business world.
Let’s get the bad news over with. The primary focus of the index is to trace small business competitiveness over time. And the news here is unsurprisingly not so good. “The competitive health of America’s small businesses is as low as it has been since the Small Business Success Survey began tracking at the onset of the recession,” the report notes.
So what’s stifling competitiveness? Lack of access to capital is the leading culprit. “For the past two years, small businesses have consistently suffered from weaknesses in the critical [area] of Capital Access,” the report states.
Perhaps more disheartening is that competitiveness in the Innovation and Marketing dimension declined as well. Specifically, small businesses’ ability to identify new customers and to position themselves efficiently and effectively vis-?-vis larger competitors is worsening. The result, according to the report, is “an unprecedented lack of confidence in competing with big business.”
But there’s good news too! The survey found that more than 25 percent of respondents will hire this year; technology investments are increasing; and more companies are employing social media. There is a widespread awareness among entrepreneurs of social media tools. The two most commonly used social media platforms are Facebook (27%) and LinkedIn (18%). The growth in social media use, however, is not cutting into the company’s budget, but rather it is actually contributing to small business expansion.
Despite their poor competitive health, the survey found business owners were growing increasingly optimistic about the economy’s prosperity and their own business’s financial future. Small businesses are also more hopeful about the economic milieu for the next 12 months than they were a year ago. The percentage who say they are being affected by the recession is also declining, after peaking last year.