The mood among the nation's small business owners is picking up.
After the Wells Fargo/Gallup Small Business Index plunged 28 points to -11 in November 2012, the most pessimistic level in two years, the most recent index indicated small business owners are feeling more optimistic: The index improved 20 points to +9 for the first quarter of 2013. The survey, conducted Jan. 7-11, signifies increased optimism among business owners about their overall financial situation for the next 12 months. Seventy-one percent of business owners expect the number of jobs at their companies to remain the same during this time, and 17 percent expect to add jobs in the next year, too.
What's the prognosis for your business over the next 12 months? Are you feeling less gloomy about its future, as well? Every small business owner contends with issues surrounding market size, competition and demand, but the internal factors that focus on operations, strategy and leadership are within your control. Smart small business owners know that attention to these areas keep them out of the red:
Price for Profitability
Identifying your profitable price point is key to keeping business in the black. If you find you need to raise your prices, there are several approaches you may take. Roy Rasmussen, author of "Cloud Computing Simplified for Small Businesses," recommends distinguishing yourself from your competition by offering an additional value or bonus that justifies a higher price. Investigate introducing an additional product or service line that you can sell to your customers for repeat business, and consider switching your target market to include a higher-income demographic, such as professionals in a niche market. Depending on the business you're in, a few repeat customers or clients with an American Express Gold card in their wallets can be just the boost you need to maintain a profit.
Staff for Efficiency
Hire people who are passionate about the industry you're in and believe in the product or service you provide. Consider part-time employees and freelancers, as well – according to a recent Elance survey, small businesses are shifting to hiring part-time employees and contracting projects out for specific skill sets. By being open to using these types of employees, small business owners not only save money on full-time salaries and benefit packages, but they won't have to lay off full-time employees should business slow down. The number of full-time employees who quit and turn to freelance will triple in 2013, and that leaves small business owners with many qualified, and oftentimes less expensive, options for staffing.
Step Up the Tech
To be a smart and effective small business owner, you and your team need to step up the technology game. We're not talking exclusively about posting Facebook updates or Twitpics; we're referring to utilizing advanced technologies and software to maximize their potential and increase income for your business. The U.S. Small Business Administration (SBA) recommends investing in select technology services such as:
Accounting software. Accounting software enables you to see your profits and losses at a glance and can help you design and maintain a budget for your business.
Planning software or tools. There are many online planning systems that help you keep your calendar organized. Find a system that meets your business needs and stick with it.
Time-tracking software. A time-tracking program helps determine what tasks result in a profit and what tasks do not, and therefore can be eliminated, outsourced or improved. For software that requires a fee, ask for a free trial first to make sure it’s right for you.
In addition, there are a variety of data tracking systems for people who don't like Microsoft Excel or whose business has outgrown spreadsheets. It may be time to investigate if one can help you save money and time.
Expand Your Focus
Don’t preach to the choir; there is no need to continuously focus your marketing efforts on those who are already invested in your brand. Find new fans. While it is important to remain loyal to your customers, do not disregard the importance on focusing on those who haven’t experienced your brand. Jason Rzepka, vice president of public affairs at MTV, told tedxpresidio.org, “If you always target the converted user, you're not reaching the audience that you could if only you thought more broadly.”
Think Outside the (American) Box
In today’s global economy, small to midsize businesses are encouraged to research and engage in foreign markets. The middle class is emerging strongly in developing nations, with many looking to do business with Americans. According to the SBA, nearly 96 percent of the world's consumers live outside the USA and two-thirds of the world’s purchasing power is in foreign countries. When considering a global business, Carolita Oliveros, an attorney who specializes in international business, told indiancountrytodaymedianetwork.com, “One of the first steps in preparing your business for foreign markets is to assure the protection of your intellectual property, and it begins in the planning process… establish your business in the form of an LLC or a corporation and make sure to file for trade names and patents.” She also suggests businesses develop a business plan that includes some consideration to all aspects of exporting their goods or service across international borders.