Sam Walton, the late founder of Walmart, said "There is only one boss, the customer. And he can fire everybody in the company, by spending his money somewhere else."
May 1-7 is National Small Business Week and the occasion should reminds us of entrepreneurs across the country who strive to serve their customers well, and who provide much-needed employment in their local communities.
Small businesses create nearly two-thirds of net new jobs in the United States each year.
Related Article: Boom or Bust? The Impact of an Economy Driven by Startups
Decline in Confidence
But despite the optimism needed to lead an enterprise, small business sentiment continues to decline in the first half of 2016, driven in part by concerns over taxes, regulation, economic uncertainty, and the repercussions of the upcoming November elections.
Capital One’s latest Spark Business Barometer shows a nine-point drop in the percentage of business owners who see conditions as "good" or "excellent" compared to one year ago.
Also, 26 percent of respondents reported plans to increase their workforce in the next six months. That figure was at 32 percent the same time last year, which means fewer small business owners are planning to hire. The Spark Business Barometer reached out to a national sample of 401 for-profit small businesses with total annual revenues of less than $10 million.
Concerns Over Regulation, Elections
Electoral politics has generated widespread media coverage, and its ramifications are in the minds of many entrepreneurs. "One in every four (25 percent) of respondents say their primary business concern this year is related to the potential impact of this year’s presidential election on small business," says Keri Gohman, head of small business banking at Capital One, in an interview with Business.com.
"More business owners are concerned about the election than keeping up with competition, hiring and retaining talent, and regulatory issues."
The anxiety over changes in Washington seem to be rooted in concerns over regulation and its impact on small business. According to Spark Business Barometer:
- 29 percent of small business owners are focused on changes in tax policies
- 17 percent fear growing healthcare costs
- 15 percent are worried about regulatory changes on a local and national level.
Action Plan for Business Owners
Despite the drop in small business sentiment, business owners can do a few things to acquire new customers, be more cost-efficient, and focus on the things they have under their control.
Here are a few tips:
1. Promote your business on social media.
For many, social media is a great platform for marketing products and services, especially at a local level. Yet, 40 percent of business owners don't have a social media presence.
"Despite rapid innovation and expansion of new digital, mobile and social tools designed to help businesses market themselves and drive efficiencies, a lot of businesses are not leveraging these technologies," says Gohman.
"In fact, 40 percent of business owners surveyed say they don't currently utilize social media at all for their businesses. Additionally, only 26 percent of business owners who use social media say they are 'very familiar with the ability to leverage market and sell products through various social media channels."
Mobile customers have access to digital apps that identify neighborhood businesses and their location. By establishing a presence on social media, local businesses can put themselves on the digital directory.
2. Use more tools to help you manage your business.
Analytics, social media, card rewards programs, and other tools can help small business owners run their enterprise. Capital One's survey finds that only 29 percent of business owners who have a credit card use a rewards program to pay business expenses. And less than 21 percent of business owners currently use data analytics to make more informed business decisions.
Business owners should go online and search for "top business apps" to leverage digital tools that will help their business be more efficient and effective.
3. Use freelancers for small tasks.
It's estimated that more than one-third of the American workforce (53 million) are temporary or freelance workers. Small businesses have a smaller margin of error when it comes to hiring employees. Thus, one solution is to hire freelancers to complete small projects such as designing a web page, managing a social media account, or creating a business logo.
Fiverr.com is a site that allows you to find service providers who'll complete tasks for as low as $5. By going digital, business owners will gain access to talent outside of their local community.
Small businesses are vital to the national economy as well as their local communities. That's because they create most of the net new jobs in the United States each year. Sam Walton's quote about the importance of the customer shows that for small businesses, it's always key to attract and retain new business.
According to the Spark Business Barometer, business owners are concerned about taxes, regulation and economic uncertainties. Entrepreneurs should use emerging digital tools to help them survive and thrive in the new economy.