Primary Challenges for U.S. Small Businesses

On April 27, 2005, HP released a survey that shows the primary challenges for U.S. small businesses are core business issues: operations, customer relations and employee relations. But even as they focus on the basics, small-business owners have an eye on the future, with plans to significantly increase technology spending and adoption of new technologies.

The survey, conducted by Harris Interactive and released in conjunction with National Small Business Week events held in Washington, D.C., polled nearly 400 small businesses nationwide in early March.

Survey results showed that community involvement and supporting local businesses are high priorities for small business owners. More than half of the survey respondents were women, who reported that being a role model, teaching others and giving back to their community are key motivators. Wealth was less important to women when considering whether to start their own business.

“This survey highlights the optimism of small business owners and underscores the growing importance of technology to solve their day-to-day business challenges,” said Kevin Gilroy, senior vice president and general manager, Small and Medium Business, HP. “As the leading global technology provider to small and mid-size businesses, HP is passionate about understanding entrepreneurs, from their business challenges to their personal aspirations. The survey confirms that the HP Smart Office initiative is on the right track by providing a simple, easy-to-understand approach to technology.”

HP’s Smart Office program provides small and mid-size business customers with reliable, high-quality products and solutions; local and specialized expertise; and a simplified experience with technology. Whether it’s a complete family of reliable mobile products and solutions, tools and technology for developing marketing materials or local service and support through a network of local partners, HP delivers a superior ownership experience, so customers spend less time worrying about technology and more time focused on their businesses.

Overall trends

Business operations are a primary challenge for small businesses owners. Eight out of 10 (80 percent) respondents cited operations such as reducing costs or cash management as one of their top challenges. Customer-related issues such as customer retention and acquisition were cited by 44 percent of survey respondents as a key challenge; employee-related issues posted a similar response at 43 percent. Employee issues are largely driven by health insurance coverage – a concern for nearly one third (32 percent) of small business owners.

Survey respondents were upbeat about investing in their small businesses. Ninety-four percent plan to dedicate additional financial resources during the next two to three years to reduce operational costs with technology another key area for increased spending.

Community involvement was at the heart of many small business owners’ answers. When asked what they liked most about being a small business owner, 72 percent said making a contribution to the local community. The survey found that small businesses support their local community most commonly by making financial donations to charities (79 percent), hiring employees from their local community (64 percent) and volunteering their time (64 percent). In addition, those who use a local company for technology service and support said their No. 1 reason for doing so was because they prefer supporting local businesses (85 percent).

“As counselors to thousands of small businesses across the country, we see firsthand how small business owners strongly value their ability to give back to the community around them,” said Ken Yancey, chief executive officer, SCORE. “Helping companies find a better way to operate and succeed is the kind of work that SCORE counselors facilitate every day. The results of the survey confirm the importance of the success of small business to the local and national community.”

View the full Small Business Survey conducted by HP.

Resource: HP