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Wells Fargo Survey: Small Business Owners Look to Changes in Operations, Employment in 2011
added: 2011-01-27

According to the latest Wells Fargo/Gallup Small Business Index survey, conducted in November 2010, 57 percent of business owners surveyed say they plan to make changes in 2011, with 43 percent saying they plan to expand their business operations. Of those respondents who are looking to expand, 56 percent say they intend to add employees.

Hiring continues to be a focus for business owners. Looking back at 2010, 51 percent of business owners with paid employees say that they hired new employees. Forty-one percent of those business owners who hired did so to replace an employee who left; another 21 percent were hired to support growth or expansion plans. Of the business owners who hired in 2010, 42 percent say they hired fewer new employees than they needed. Business owners foresee a somewhat better employment outlook in 2011: 18 percent say they expect hiring to increase at their companies over the next 12 months, up from 13 percent in Q3 2010.

Mary Canales, owner of Ici Ice Cream in Berkeley, CA, is one such entrepreneur. “When expansion or marketing opportunities arise, we always look to the original mission defined in our business plan. Other aspects of our plan may change, but growing slowly and thoughtfully with the mission in mind is fundamental,” says Canales. Ici Ice Cream currently employs a staff of 36 in Berkeley and hopes to hire another manager. “Building a bigger kitchen and adding management help will give me more time to pursue opportunities that fit my original business idea.”

Compared to the same survey questions asked in 2008, this quarter’s Index shows some additional signs of optimism. Business owners surveyed in 2008 were bracing for the worst: cutting operating costs was a key focus, indicated by 79 percent as a very high or high priority. This year, while cost cutting remains a top concern (64 percent), other more forward-looking priorities have gained ground, including being more involved in communities (43 percent), planning a succession strategy (42 percent), and increasing advertising and public relations (40 percent). Using social media and increasing investments in technology are also cited as high priorities by approximately a third of those surveyed.

Business owners also responded with their key concerns for 2011. The most pressing concern was retirement and succession planning, with 64 percent saying they worry about putting enough money away. However, 57 percent indicated that saving for retirement is actually a low priority for the coming year – evidence that many business owners may still be facing considerable financial stress.

“Business owners continue to focus on their financial health and appear to be heading into 2011 with cautious optimism about business growth prospects,” said Doug Case, Wells Fargo Small Business Segment Manager. “Wells Fargo is committed to providing knowledgeable bankers and educational resources to help owners navigate the changing business environment and take advantage of new opportunities.”

Source: Business Wire

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