How are you feeling about business going into 2018? Going into the new year, small business owners are feeling pretty upbeat, according to the latest Wells Fargo/Gallup Small Business Index survey.The survey further reveals that small business owners are reporting more positive pictures of their revenue in 2017. In fact, 46 percent say their revenue has gone up over the past year versus only 37 percent who reported the same one year ago. Similar year-over-year increases are seen in owners’ reports of their cash flow and their ease of obtaining credit.
The percent of small business owners rating their company’s current financial situation as “very good” or “somewhat good” is now 71 percent, higher than last year’s 66 percent.
Hiring: the good, the bad and the ugly
Small business owners planning to hire is increasing, the survey says, which means there is more fight for the same pool of employees. They even report increasing the number of jobs available at their businesses.
Unfortunately, the higher intention to increase jobs is happening at the same time as the increase in small business owners worrying more about being able to hire good employees. When asked to identify the most important challenge facing their businesses today, 16 percent of owners name hiring and retaining qualified staff — the highest on the list behind government regulations (11 percent), taxes (11 percent), financial stability/cash flow (8 percent), costs/fees of running the business (6 percent) and competition/larger corporations (6 percent).
Is bigger always better?
Newsflash: 71 percent of your larger commercial customers are at risk of taking their business elsewhere.
Since commercial clients tend to be your larger accounts, this number, as reported by Gallup, should scare you. Large accounts tend to attract a lot of attention, which is why the competition is always trying to steal them away. So while winning the big clients can certainly lift revenue, larger revenue clients can be more challenging and demanding to service, keep happy and keep profitable than smaller accounts.
Gallup’s Jeff Durr and John Flming say poor economic growth has forced your commercial customers to hit earnings targets by cost cutting and accepting low bids. Unfortunately, this pressures you to deliver exceptional service at bottom-dollar prices.
They suggest business owners look at the major drivers of poor profitability in their commercial customer bases to find unique ways to improve business outcomes with these high-revenue, high-profile clients. “Early in the sales process,” they say, “companies should evaluate the extent to which these drivers might affect the new relationship – never being afraid to walk away from bad business.”
They recommend providing customer survey data with tactical account management to optimize profitability, employee engagement and, essentially, customer engagement.
Here’s to a profitable and productive 2018.