Looking out 12 to 24 months, small business owners say their companies will emerge from the recession strong and well positioned for growth over the next two years, leading the U.S. to economic recovery.
According to new study, The Guardian Life Index: What Matters Most to America's Small Business Owners, small business owners are confident even in the face of the significant challenges of the economic downturn. The study says this optimism is the result of their passionate, confident focus on three core pillars of business success: their customers, their employees and their own self-dependence.
Overall, 92 percent of small business owners expressed optimism about their enterprises, with 54 percent expecting to maintain business as usual and 38 percent confidently looking forward to expanding their businesses over the next 12 to 24 months.
The Guardian Life Index examined small business owners within 13 key industry sectors. Optimism varied across these sectors with respect to revenue projections for 2009. Sectors with the highest number of owners who anticipate stable or increased 2009 revenues are traditional health care (72 percent), financial services (68 percent), high tech products/services (66 percent), dining and accommodations (66 percent) and manufacturing (57 percent).
From a regional perspective, the South has the highest percentage of owners (62 percent) who project stable or increased revenues for 2009, followed by the Northeast (61 percent), the Midwest (59 percent) and the West (56 percent).
Texas is the state with the highest percentage of owners (69 percent) who project stable or increased revenues for 2009. That optimism contrasts with California (51 percent), New York (49 percent) and Florida (49 percent).
The study, which was commissioned by the Guardian Life Small Business Research Institute and fielded in May 2009, used a 21-point scale (from +10 to -10), to measure the positive and negative intensity of responses to issues.
Small business owners in the aggregate build and sustain some 20 million individual small businesses that collectively account for 50 percent of U.S. gross domestic product and 44 percent of the nation's payroll.
"Small business owners are the backbone of the U.S. economy," said K. Rone Baldwin, executive vice president and chief operating officer, Guardian Life Insurance Co. of America. "Their deep, intensely personal focus on customers and employees, coupled with their strong self-reliance and determination bode well for a national economic recovery."
In the Guardian Life Index, customers are small business owners' number one concern. Exemplifying small business owners' deep commitment to customer satisfaction and loyalty are their very positive responses to: "Having customers who appreciate what I do" (5.8), "keeping the customers I have from leaving" (5.6) and "making my customers into friends" (3.9). Positive intensity numbers above three are highly significant, according to the researcher who designed the methodology and conducted the study, John Krubski, a former Yankelovich research executive and futurist.
Small business owners are similarly passionate about their employees. At an intensity level of 5.5, "my employees" ranks nearly as high as customers in importance. Other evidence of the deep commitment small business owners have to their employees is illustrated by their positive responses: "Giving my employees reasons to feel good about being part of our team" (4.3) and "helping others to have income and opportunities" (3.9). At the opposite end of the scale are issues that matter least. Even slightly negative numbers indicate strong passions, according to Krubski. In the study, small business owners reacted very negatively to "cutting back on employee benefits" (-0.1), "reducing the number of employees" (-0.2) or "moving full-time employees to part-time schedules" (-0.9).
Finally, the third pillar for what matters most to small business owners is their personal freedom and independence, as these positive intensity metrics underscore: "personal freedom" (5.3), "being able to make my own decisions" (4.9) and "doing something for a living that I love to do" (4.2).
Contrasting the metrics associated with customers, employees and self, small business owners' feelings about financial matters are about half as intense: "being able to add significantly to my retirement funds" (2.5), "making enough money to pay my family's personal expenses" (2.4) and "being able to pay myself as much as I should" (2.3).
The Guardian Life Index: What Matters Most to America's Small Business Owners polled more than 1,100 respondents representing 13 small business industry sectors, nine geographic regions, four key states (California, Texas, New York and Florida) and two major DMA's (New York and Los Angeles). It was fielded in May, 2009.