When asked about their own business situations, owners report similar quarterly and yearly trends, with 34% claiming that 2012 will end up better than business was last year, but only 27% saying they have seen that improvement by August. Comparing short-term frustration to full-year results, 43% project actual sales growth for 2012 over last year. In fact, 42% of respondents expect 2012 business sales or revenue to meet their goals and 14% expect to exceed goals.REINVENTION TO REMAIN RELEVANT Consistent with last quarter, more than half of respondents (52%) have reinvented their businesses to stay afloat or be more competitive in today’s marketplace. In August, 60% of respondents said they have added or changed the products they offer. Another 51% of “reinventors” overhauled their technology infrastructure, including replacing networks, computer systems and software systems. Among those who made changes, 40% say the initial trigger for reinvention was simply a feeling that something needed to change. Based on that gut reaction, they recommend research and to “get educated” as the first step in making those changes happen. “Intuition can lead many small business owners to success in their quest for growth, because they remain close to their customers, the marketplace and operations,” says Byers. “While they often feel the need for change, they consistently reinforce that feeling with up-to-date knowledge to keep their business thriving. They even suggest research, education and following market changes to other business owners who plan to make significant changes.” About the Citibank® Small Business Pulse This Citibank survey was conducted via telephone August 9, 2012 – August 30, 2012 by Abt SRBI Research and Public Affairs among a national random sample of 750 small business owners/operators, age 18 and older throughout the United States. Oversample interviews were conducted in New York (200 interviews) and California (200 interviews) markets. The margin of error for the national sample is approximately +/- 3.58% and +/- 6.93% for New York and California over samples. Surveys are subject to other error sources as well, including sampling coverage error, recording error, and respondent error. About CitiCiti, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management. Additional information may be found at www.citigroup.com | Twitter: @Citi | YouTube: www.youtube.com/citi | Blog: http://new.citi.com | Facebook: www.facebook.com/citi | LinkedIn: www.linkedin.com/company/citi Copyright © 2012 Citigroup Inc. Tags/Keywords:Citi, Citibank, small business, CitiBusiness, Citibank® Small Business Pulse © 2012 Citigroup Inc. Citibank, N.A. Member FDIC. Citibank and Citi with Arc Design are registered service marks of Citigroup Inc.
Maintaining and increasing sales is the most important short term business issue for 74% of small business owners, 41% of whom cite lackluster consumer spending as the root cause, according to the Citibank® Small Business Pulse released today. Both the cause and effect of weak sales lead to cash flow concerns. According to the survey, 50% of respondents have experienced a sudden cash crunch in the last 12 months. Despite the need for careful cash management, 78% of small business owners have given payment extensions to customers. “We admire and support the resilience and commitment shown by small business owners who find ways to move their companies forward,” said Jerome Byers, head of Citibank Small Business. “In recent years, companies have tightened belts, gained efficiency and reinvented their businesses to survive in a tough economy.” CASH FLOW IS KING Managing cash flow is a job most small business owners won’t trust to anyone but themselves. Nearly three quarters (73%) say they are “on top of it” and manage their cash flow daily. Thirty percent of respondents say the greatest challenge to managing cash is slow/delinquent receivables and bankruptcies, while 24% blame late or non-payments for a sudden cash crunch in the last 12 months. Yet 23% of respondents find making a collection call the most uncomfortable business finance challenge – second only to reducing staff (35%). Referring to the need for sales, 28% report that their sudden cash crunch was due to sales that did not pick up as expected. “A slow economy forces the small business owner to focus on daily finances,” said Byers. “That’s a difficult balancing act with the need to think broadly and strategically about business plans.” BUSINESS CONDITIONS AFFECTING SALES Despite a quarter-to-quarter reduction in confidence, small businesses report slightly better business conditions than a year ago. In August 2012, 38% of respondents found business conditions positive, increasing from 34% in August 2011. Another 25% say business conditions are poor, relatively flat from the last survey in May (23%), but reduced significantly from 31% a year ago. Still concerned about the future, 85% of those surveyed believe the economy may experience another downturn. That number is slightly lower than the 90% who expected it a year ago.