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Small business owners positive about growth despite concerns about regulation and access to capital

New York, NY “ Fifty-eight percent of small business owners expect business growth within the next 12 months, according to CAN Capital, Inc., the market share leader in alternative small business finance. This finding is part of CAN Capital’s quarterly Small Business Health Index, powered by SurveyMonkey. The Index taps into key issues and trends that can help business owners across the country expand and grow their businesses including access to capital, marketing, government regulation, competition, and talent recruitment and retention.

While a majority of small business owners are optimistic about growth, we are seeing concerns about being able to access needed capital, keeping up with new trends in mobile and digital advertising, meeting new regulatory requirements, and winning the war for talent with larger competitors, said Daniel DeMeo, Chief Executive Officer, CAN Capital. At the same time, there is an appetite for expanded marketing efforts, hiring and investments in inventory, equipment and technology. Our survey aims to provide insight into the challenges and opportunities that exist in the marketplace and shine a light on potential solutions that will help businesses achieve their growth goals.

Promoting Growth

Small businesses are increasingly realizing the importance of new forms of marketing and advertising. Survey data shows that 38 percent of small businesses are looking to expand and/or try new forms of advertising/marketing activities (such as online ads, email marketing, etc.) within the next year, up from 31 percent last quarter. Thirty percent also cite digital marketing as being very or extremely important.

However, while many small business owners plan to expand and/or try new forms of advertising/marketing activities, they are still unsure about how to navigate this area, with 39 percent saying they have not optimized their business’ website for all mobile devices. Furthermore, only 31 percent cite social media marketing (such as Facebook ads) as being very or extremely important to their growth strategy.

Thirty-five percent of small business owners surveyed say their growth plans include purchasing equipment and/or making inventory investments, up nearly 10 percentage points from last quarter. Twenty percent of small business owners plan to hire more people and another 20 percent plan to implement new technologies or operational tools (such as a customer relationship management system).

In terms of consumer trends, 41 percent cited mobile and/or online business reviews as having the biggest impact on their small businesses. This was followed by online shopping, which was cited by 34 percent. Despite the increased popularity of online shopping, more than 50 percent of small business owners surveyed do not accept payments online.

Navigating Challenges

More than two-thirds of business owners said they faced challenges growing their businesses over the past year. However, no one challenge stood out, with between 10 and 14 percent of respondents citing each of the following: Navigating and remaining profitable through recent regulatory changes, not having a good understanding of new technology-based marketing tools that could help them grow their businesses, trouble identifying and/or retaining quality new hires, and not understanding how to obtain working capital.

From a regulatory perspective, the Affordable Care Act was cited as the most significant regulation that has had or will have an effect on small business, followed by the minimum wage increase and new overtime law changes. Respondents were not asked if they expected the effect of these regulations to be positive or negative.

When competing with big businesses, offering competitive prices was seen as the biggest challenge, with the ability to offer competitive benefits for employees coming in second. These were also the top two concerns of small business owners last quarter. As they did last quarter, 35 percent of small business owners said the biggest threat to small businesses today is rising employment costs.

Capital Access

Forty-three percent of small business owners surveyed anticipate needing external capital to run their small business in the next year, down slightly from 45 percent last quarter. Sixty-one percent say it is quite or extremely challenging to gain access to this capital, compared with 65 percent who said the same thing last quarter.

Applying for a bank loan was cited by 34 percent as the easiest way to obtain funding/working capital, making it the top option again this quarter. However, for the second quarter in a row, loans from friends and family were cited as the number one way respondents have secured funding/working capital. In our latest survey, nearly half (49 percent) said they secured funding this way, up from 40 percent last quarter. This compares with 41 percent who said they were successful in securing a business loan from a bank through a traditional process. Last quarter, 27 percent said they successfully secured a loan from a bank.

DeMeo said, While it seems that people are having more success lately in securing bank loans, that method still pales in comparison to going to friends and family, suggesting that the traditional bank loan process still isn’t working as well as it should. More than one in ten small business owners told us they are unsure of what sources to go to for working capital, and many appear to be unaware of the ease of new options such as peer-to-peer lending or selling a portion of future credit card receivables, with fewer than 15 percent taking advantage of each of these options. CAN Capital offers tools to educate business owners about these and other options so they can explore the full array of opportunities available to help them expand their businesses.

Learn more about the CAN Capital Small Business Health Index, powered by SurveyMonkey by visiting www.cancapital.com.

Note to Editors

The CAN Capital Small Business Health Index, powered by SurveyMonkey is an index measuring small business owners’ sentiment about economic, business and consumer trends as well as other factors such as access to capital, growth and competition.

CAN Capital conducted an online study of small business owners between September 19 and September 29, 2014. Respondents included small business owners from across the United States. Percentages are based on 1,248 responses.

About CAN Capital

CAN Capital, Inc., established in 1998, is the pioneer and market share leader in alternative small business finance, having provided access to over $4 billion in capital for tens of thousands of small businesses in a wide range of locations and different business types.

As a technology-powered financial services provider, CAN Capital uses innovative and proprietary risk models combined with daily performance data to evaluate business performance and facilitate access to capital for entrepreneurs in a fast and efficient way. Its business evaluation model allows it to help small businesses qualify for more money than they could obtain elsewhere.

CAN Capital makes capital available to businesses through its subsidiaries: Merchant Cash Advances by CAN Capital Merchant Services, Inc., and business loans through CAN Capital Asset Servicing, Inc. (CCAS). All business loans obtained through CCAS are made by WebBank, a Utah-chartered Industrial Bank, member FDIC.

For more information, please visit: www.cancapital.com. Follow CAN Capital on Twitter and Facebook.

About SurveyMonkey

SurveyMonkey is the world’s leading online survey platform, with more than 2 million survey responses every day. SurveyMonkey has revolutionized the way people give and take feedback, making it accessible, simple and affordable for everyone. The company was founded in 1999 with a focus on helping people make better decisions, and has built technology based on over 10 years of experience in survey methodology and web development. Customers include 99 percent of the Fortune 500, academic institutions, organizations and neighborhood soccer leagues everywhere.

The company has more than 275 employees worldwide with headquarters in Palo Alto, CA. For more information, visit www.surveymonkey.com.

Contacts
Cristina Martinez
Prosek Partners
(212) 279-3115 x215
[email protected]