Small Businesses to Rely More on Human Resources Solutions To Boost Productivity Next 12 – 24 Months; Greater Emphasis On Facilities to Support Expansion

NORTHFIELD, IL (November 1, 2007)  --  Small businesses owners said during the third quarter of 2007 that they plan to more heavily focus on either improving staff training or adding more staff to improve their productivity over the next 12 to 24 months,  according to the latest Small Business Research Board (SBRB) study released here today.

The quarterly nationwide SBRB poll indicated that these same small businesses intend to more greatly concentrate on expansion plans through the addition of or enhancement to facilities rather then through changes to their product or service offerings.

Improvements in staff training or the addition of staff was cited by 43.9% of the respondents to the third quarter study poll co-sponsored by International Profit Associates (IPA) as their principle plans for increasing productivity during the next 12 to 24 months.      Improved staff training with 22.3% and the addition of staff with 21.6% were the two leading methods for generating greater productivity in the coming months  by small businesses during the most recent poll. 

This jump to 43.9% was a 2.5 point increase from the 41.4% who responded during the second quarter indicating they were seeking human resource based solutions to improving productivity.

The small business owners and managers said they would put slightly less emphasis on automation and technology as solutions to boosting productivity the next 12 to 24 months.  The 38.4% who indicated that automation and technology would be the prime methods for enhancing productivity was 1.9 points fewer than the 40.3% who said the same during the prior quarter.

The addition of more automation or technology was listed by 19.6% of the respondents during the third quarter while 18.8% said they would improve existing systems.

As for expansion, 32% of the more than 800 participants in the most recent poll said they have plans to expand the next 12 to 24 months.    This is equal to the second quarter result.

However, expansion at current locations or the addition of new locations were cited by 42% of the respondents to the third quarter study poll co-sponsored by International Profit Associates (IPA) as their principle growth plans, up from 38% during the second quarter.  Expansion at current locations is the leading choice as indicated by 23% of the participants while 19% said they would add locations. 

Enhancing customer service capabilities, adding new products and providing more services finished behind the facilities anchored choices as plans for expansion during the next two years.

 “It appears the pendulum is swinging among small businesses from contending with easier to manage automation and technology issues and expenses to facing more complicated matters concerning the hiring, training and cost control of their human resources,” said Gregg M. Steinberg, President of IPA.

As previously reported, the SBRB Small Business Confidence Index (SBCI) dropped to 43 during the third quarter, a decline of three points from the previous quarter.  The opinions and projections about the strength of the economy, revenues and hiring looking forward 12 months are the three key ingredients to determining the SBCI and providing the basis for these quarterly and annual comparisons. 

The historical SBRB SBCI high was during the first quarter of 2005 when the SBCI hit 52 points.  The historical low was during the third quarter of 2005 when the SBCI fell to 39.3 points.

Regionally during the third quarter of 2007, businesses in the Northeast, South / Southeast and West / Pacific regions all agreed that improving staff training, adding more staff and adding more automation or technology, respectively, would be the top three methods for increasing productivity.   Businesses in the Midwest shared the opinion that all three would be the key choices, however, more businesses in that region view adding more staff more likely than improving staff training.            

The quarterly poll of small business owners and managers also indicated that businesses in the western US had more aggressive plans for the expansion than in other regions of the US.   The study indicated that 39% of the businesses in the western states plan to expand over the next 12 to 24 months versus 33% in the Northeast, 32% in the South / Southeast and 27% in the Midwest.

The 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.   The SBRB conducts these studies for the benefit of small business owners and managers.   The SBRB also provides opportunities for third parties to gain real time insight into the attitudes of small businesses nationwide through the independently conducted research. 

The universe of participants is developed from among small businesses across the United States.   The SBRB study is a voluntary survey conducted via phone and email. 
The latest information about the 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-size businesses in North America.    IPA, based in Buffalo Grove, Il., 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.

Small Business Research Board U.S. Third Quarter 2007 Issues 

Copyright 2007 Small Business Research Board (SBRB)