Owners also indicate they intend to improve profitability through expense
reductions, investments in productivity improvement and facility upgrades
BUFFALO GROVE, IL (November 29, 2006) – Small business owners and
managers, armed with results from the first three quarters of 2006 and thoughts
about the coming year, are showing heightened confidence for their business
prospects during the next 12 months, according to the latest International
Profit Associates Small Business Research Board (IPA SBRB) study released here
today.
Furthermore, the most recent nationwide study clearly indicates that small
business owners are optimistic for attaining higher revenue levels, despite
remaining bearish about the overall strength of the economy.
The IPA Small Business Confidence Index (IPA SBCI), which measures
expectations regarding the general economy, revenue growth and hiring looking
forward 12 months, rose to 42.7 as a result of the most recently completed
survey or an increase of 3.4 points from the 39.3 index reported at the outset
of the third quarter. By comparison, the IPA SBCI began 2006 with an index of 52
points and followed with a drop to 47.3 at the start of the second quarter. The
IPA SBCI was 55 at the start of 2005.
While 39% of the business owners believe the general economy will improve
during the next 12 months (a decrease of 3 points from the 42% who had a
favorable outlook in the previous period), nearly 60% of the respondents said
they believe their revenues will increase during the same period. The poll
indicated that 38.5% of the respondents said that they expect revenue increases
of 10% or greater and 20% said they believe their revenues will be up to 10%
better during the coming 12 months. This is a sharp contrast to the previous IPA
SBRB report issued in August which indicated that 46% of the respondents
representing a cross section of small businesses said they were expecting
improved revenues -- 31% stating that revenues would be 10% or better and 15%
stating that revenues would b up to 10% better.
Thoughts about hiring were nearly identical to the previous input with 30% of
the small business owners intending to increase hiring and 9% intending to
decrease their workforces.
"What is truly clear is the intention of the small business owners to be
realistically concerned, practically involved and carefully optimistic about the
future of their businesses," said Gregg Steinberg, President of International
Profit Associates, the largest privately-held provider of management consulting
and professional services to small and medium-size businesses in North America.
"Small business owners know the economy is tough, and may become even more of
an obstacle, yet they are predicting higher revenues and planning for greater
profitability. The results of the IPA SBRB poll indicates that business owners
are going to work hard on cost reduction while investing in methods to improve
productivity. Furthermore, the overwhelming majority are making plans to improve
their current facilities rather than add more real estate commitments,"
Steinberg said.
| LEADING SMALL BUSINESS GOALS FOR 2007 |
| Increased revenue |
22% |
| Reduced expenses |
18% |
| Improved productivity |
13% |
| Upgraded facilities |
9% |
| Additional facilities |
0.4% |
Increased revenue (according to 22% of the respondents), reduced expenses
(18%), improved productivity (14%) and upgraded facilities (9%) are the leading
small business goals for 2007. The addition of facilities at 0.4% was last on
the list of goals.
The International Profit Associates Small Business Research Board ascertains
and reports the opinions of small business owners and managers on a wide variety
of topics related to their own businesses as well as national and international
issues that may impact their operations.
Participants in the poll provide feedback on significant issues and allow for
real-time insight into the state of small businesses nationwide. The universe of
participants is developed from among small businesses across the United States.
More than 550 small business owners and senior managers participated in this IPA
SBRB poll. The IPA SBRB study is a voluntary survey conducted via phone and
email. The poll was structured and supervised through an independent resource.
The latest information about the IPA Small Business Research Board can be
found at www.ipasbrb.com.
International Profit Associates, Inc. (IPA) is the largest privately held
provider of management consulting services to small and medium-sized businesses
in North America. IPA and its more than 1,800 professionals offer a wide range
of proven and innovative methodologies to help businesses grow and prosper
regardless of the economic cycle. IPA either provides directly or through its
affiliated companies a comprehensive array of business advisory services, tax
and estate planning services or merger, acquisition and other financial advisory
services in the United States and Canada. More information about IPA can be
found at www.ipa-iba.com.
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