SMBs are optimistic about increasing revenue in 2015, and almost four in 10 plan to up the ante on tech investments this year.
By Andrea Coombes
When you’re busy running a small- or mid-sized company, it’s tough to stay up-to-date on what other businesses are doing. But gaining insight into how other SMB owners are thinking about their prospects for growth and their plans for technology investments can provide a framework for your own decision-making.
A couple of phrases that might sum up recent surveys of SMB owners might be “restrained optimism” and “strategic tech spending.”
For example, when asked about their expectations for their business, 57% of those surveyed said they expect revenues to grow in 2015, according to a survey of about 1,000 business leaders of companies with 11 to 499 employees, conducted online for Wasp Barcode Technologies, a maker of asset-tracking tools.
But their expectations aren’t irrationally exuberant: 28% of those who expect revenues to increase said growth will be in the 1% to 4% range. Another 19% said they expect growth of 5% to 10%.
Another survey found that 71% of SMBs had a “very positive” or “positive” business outlook for 2015 (another 25% said their general business outlook was “neutral” and 5% said their outlook was “negative” or “very negative”).
But 73% also said they don’t plan to hire new workers this year, and 54% don’t plan to make any financial investments, according to the poll of 850 small-business owners for Endurance International Group, a web hosting company (those surveyed are among the firm’s subscribers).
Tech investments on the horizon—for some
For some SMB owners, their expectations for growth are translating into plans to spend on technology: 38% of small-business owners surveyed said they plan to increase their spending on information technology, and 22% said “outdated technology/infrastructure” was one of the top three challenges facing them in 2015, according to the Wasp Barcode survey.
But it’s notable that technology didn’t top the list for business challenges. When asked what top three challenges faced their business, SMB leaders responded as follows:
- 45%: growing revenue
- 42%: hiring new employees
- 37%: increasing profit
- 29%: government regulations
- 29%: employee health care
- 29%: cash flow
- 22%: outdated technology/infrastructure
- 18%:raising capital/funding
- 14%: adding/launching new products
- 11%: collecting payments from customers
- 12%: other
- 8%: managing inventory
- 5%: expanding globally
Meanwhile, a separate survey found that 25% of small-business owners plan to increase the use of technology to manage business costs and 35% said they’d use software technology upgrades to drive business results. That’s according to a survey of 999 small businesses, conducted by Research Now for office-supply retailer Staples.
A tech-spending wish list
Are you planning to spend more on tech this year than in 2014? A total of 38% of business owners said they are, according to the Wasp Barcode survey. Of those business owners:
- 21% said they’ll increase their IT spending by 1% to 5% over what they spent in 2014,
- 11% said they’ll increase their IT spending by 6% to 10%, and
- 6% said they’ll increase their IT spending by 10% or more.
Still, 32% of small- and medium-sized businesses said they don’t plan to change their IT spending, another 12% said their IT investments will decrease and 18% said they’re not sure which direction their IT spending will go.
Of course, these figures are compared to 2014, and business owners weren’t sitting on the IT-investment sidelines in 2014. Here’s how much the business owners surveyed by Wasp Barcode spent in 2014:
- 13% said they spent less than $1,000
- 7% spent $1,001 to $2,500
- 7% spent $2,501 to $5,000
- 7% spent $5,001 to $10,000
- 11% spent $10,001 to $25,000
- 10% spent $25,001 to $50,000
- 11% spent $50,0001 to $100,000
- 15% spent $100,001 or more
- 19% said they weren’t sure.
When business owners were asked which tech investments they’d made a year ago, the survey found that:
- 51% of those surveyed said they replaced computer hardware
- 39% upgraded their network security
- 38% upgraded server infrastructure
- 29% upgraded wireless infrastructure
- 22% overhauled social-media content
So, if money were no object, what top three tech investments would you make this year? Here’s how business owners responded:
- 39% of the business owners surveyed said they’d like to replace computer hardware
- 27% upgrade server infrastructure
- 22% upgrade network security
- 21% upgrade wireless infrastructure
- 20% invest in business intelligence tools
- 18% overhaul social-media content
- 18% implement a customer relationship management system
- 13% upgrade network backbone
- 10% add a cloud computing solution
- 10% deploy disaster recovery/redundancy plan
- 9% implement an inventory management system
- 6% implement VoIP and teleconferencing
- 6% Outsource business processes
- 9% said “other”
The CRM tech solution that wasn’t?
One tech tool that gets a lot of press is customer relationship management, or CRM, software. If you’re fretting about the fact that you don’t use a CRM tool to manage your customer data, rest assured you’re not alone. Just 29% of SMBs have such software, according to the Wasp Barcode survey.
That’s right—fully 71% of companies surveyed said they don’t have a CRM solution.
Still, while it may be comforting that other small businesses don’t use CRM solutions, it doesn’t mean you should follow in their footsteps. Some say it’s important to consider the software’s benefits.
CRM tools “can maximize financial opportunities, allow businesses better access to customer information, manage sales pipelines and sales representatives, and analyze performance and business metrics,” writes John Rampton, an entrepreneur and blogger in the Huffington Post. Read the full post here.
This article was underwritten by HP: Introducing HP BusinessNow, the right technology to help your business grow. To register your business for a $25,000 tech makeover please visit: http://www8.hp.com/us/en/solutions/businessnow/contest.html