SMB Business Perspectives:

2011 Results and 2012 Projections

November 2011

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Overview and Methodology

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Objective –

Obtain a deeper view of business projections from small to mid-sized businesses (SMBs) for 2012 compared to 2011.

Approach –

Zoomerang distributed a survey to SMB decision makers over a four day period, from November 3-7, 2011.

Results –

In total, 1,003 SMB decision makers (e.g. founders, managers, etc.) completed the survey providing insights into their

2011 business results and 2012 projections.

Insights –

Economy

- Of those surveyed, a majority (61%) stated that their business had been negatively impacted by the economy, yet

40% remain optimistic or very optimistic about their business heading into 2012.

- Half (50%) of respondents failed to meet their business goals in 2011, however, only 19% have plans to diversify

their business in 2012.

Business Growth

- The biggest challenge for SMBs in 2011 was customer/client growth despite the highest hiring rate in the business

development sector. Similarly, 60% of SMBs plan to focus investments and staffing in the same sector in 2012.

- Of the SMBs creating new staffing positions, filling an existing position or promoting employees, the most promising

business sectors for job applicants are social media and business development.

- In 2012, nearly half (45%) of SMBs plan to invest money in marketing and communications. Similarly, a third (33%)

of respondents project using advertising/marketing or social media to attract new customers.

Social Media

- In 2012, more than a third (40%) of SMB respondents plan to use social media, yet only a quarter (25%) expressed

discomfort with using social tools.

- The top three reasons SMBs use social networks are: affordability, access to customers and word-of-mouth/referral.

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Annual Projection Comparisons

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Key Takeaways –

Overall Summary of 2011 Projections – (*previously completed survey findings from 2010) –

The majority of SMBs were optimistic about the coming year and were confident that the economy was

beginning to stabilize and improve, predicting higher sales and staff hiring growth.

Overall Summary of 2012 Projections –

The majority of SMBs were neutral to positive about the economy and their business heading into 2012.

Compared to 2011, SMBs are more hesitant to hire additional staff. Even though most see the value of social

media for customer relations, most SMBs do not understand the tools or feel comfortable using them.

Insights –

Economy

– 2011: As compared to 2010, the SMBs surveyed were optimistic about the economic outlook with 72%

believing it would improve or stay the same.

– 2012: When considering business performance heading into 2012, 40% of SMBs are optimistic

or very optimistic. Of those surveyed, 40% of SMBs agree that small business is the backbone of the

economy.

Business Growth

– 2011: Compared to the previous year, 89% of SMBs planned to grow or maintain their staff.

– 2012: Less than a third of SMBs plan to hire more employees in 2012 compared to

the previous year.

Social Media

– 2011: Social media adoption was slow, with only 33% of the SMB respondents planning to use social

media.

– 2012: Of those surveyed, 40% of the SMBs plan to use social media in 2012, despite a quarter of

respondents stating they do not feel comfortable using social tools.

2011: Business Goals Half (50%) of the SMBs surveyed are falling short of meeting 2011 business

goals, whereas 43% of SMBs are on track or have already exceeded most goals

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50%

36%

7% 7%

Is your business on track to meet most or all of its 2011 goals?

No, we are falling short of meeting most or all of our 2011 business goals (50%)

Yes, we are on track to meet most or all of our 2011 business goals (36%)

Yes, we have already met and plan to exceed most or all of our 2011 business goals (7%)

I don’t know (7%)

2011: Business Challenges SMBs were challenged most by customer/client growth and retention as well as

budget constraints

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0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Outsourcing manpower/materials/labor

Internal employee growth

Internal employee retention

Technology innovations

Other

Communications/Marketing/PR

Local competition

Staying in business

Customer or client retention

Budget constraints

Customer or client growth

4%

8%

9%

9%

9%

11%

20%

27%

32%

32%

44%

What were your business’ biggest challenges in 2011? (Select all that apply)

2011: SMB Business Performance Most SMBs did not experience growth or loss in the most common business

sectors

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Administration

Executive team

Human Resources

Product team

Accounting

IT

Communications/Marketing/Sales

Business development

7%

7%

8%

8%

8%

9%

14%

14%

65%

53%

49%

45%

57%

53%

46%

44%

12%

13%

13%

15%

20%

11%

23%

27%

16%

27%

30%

31%

16%

27%

17%

15%

How would you describe the performance of each area of your business in 2011?

Experienced Growth Stayed the Same Experienced Loss N/A

2011: Economic Impact In 2011, more than half (61%) of the SMBs surveyed were negatively affected by

the economy

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61% 11%

25%

3%

How has the U.S. economy affected your business in 2011?

Negatively (61%)

Positively (11%)

Has not affected (25%)

I don’t know (3%)

* In 2011, 40% of SMB respondents experienced limitations or constraints as a result of U.S.

administration policy changes.

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Aff

ects

of

2011 E

co

no

my

Plan to hire in 2012

2011: U.S. Economy Impact and Hiring Among the responses, there was a direct correlation between businesses

impacted by the economy and hiring projections for 2012.

2011: U.S. Economy Impact and Hiring Among the responses, there was a direct correlation between businesses

impacted by the economy and hiring projections for 2012.

Affects of 2011 U.S. Economy on 2012 hiring plans

2011: Employees More than three quarters of SMBs did not hire or reduce number of employees in

the most common business sectors

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Accounting

Human Resources

Administration

IT

Executive team

Business development

Product team

Communications/Marketing/Sales

4%

4%

5%

5%

5%

6%

6%

7%

85%

82%

82%

80%

83%

81%

79%

80%

11%

14%

13%

14%

12%

13%

15%

13%

Did you add more employees, reduce the number of employees or keep the number of employees the same

in each department during 2011?

Added More Kept Same Number Reduced Number

2012: Business Plans and Scope More than half of SMBs do not plan to diversify (64%) or narrow (74%) the scope

of their business next year suggests ‘business as usual’ in 2012

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No 64%

Yes 19%

I don’t know 17%

Do you have plans to diversify your business in 2012?

No 74%

Yes 14%

I don’t know 12%

Do you have plans to narrow your business scope in 2012?

2012: Business Performance More than half (64%) of SMBs have optimistic or neutral business performance

projections for 2012, and a large majority (60%) will focus on customer/client

growth

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8%

32%

32%

21%

7%

How do you feel about your business performance

heading into 2012?

Very Optimistic (8%) Optimistic (32%)

Neutral/ Don't Know (32%) Pessimistic (21%)

Very Pessimistic (7%) 0% 10% 20% 30% 40% 50% 60% 70%

Other

Geographic expansion

Internal employee growth

Internal employee retention

Local competition

Technology innovations

Communications/Marketing/PR

Budget constraints

Product or service expansion

Customer or client retention

Customer or client growth

6%

9%

11%

11%

13%

15%

21%

21%

21%

38%

60%

Which areas will you focus on improving in 2012?

(Select all that apply)

2012: Investments The top three common business sectors SMBs plan to invest in are projected to

be marketing, sales and technology/IT

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0% 5% 10% 15% 20% 25% 30% 35%

Land

Other, please specify

Office Space

Physical Infrastructure

Product Research and Development

Communications

Staffing

Capital Improvements

Education

None, will not invest

Product / Service Expansion

Technology/IT

Sales

Marketing

4%

5%

6%

8%

9%

11%

11%

11%

13%

19%

20%

22%

28%

35%

In which areas will your business invest money in 2012? (Select all that apply)

2012: Employee Growth Nearly two thirds (65%) of SMBs do not plan to hire more employees in 2012 as

compared to 2011. Of those hiring, the majority plan to add 1-5 employees

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No 65%

Yes 20%

I don’t know 15%

Does your business plan on hiring more employees in

2012 than in 2011?

44%

19%

13%

14%

4% 6%

How many employees will your business hire in 2012?

(Include P/T, F/T and temp employment)

1 to 5 (44%) 6 to 10 (19%) 11 to 25 (13%)

26 to 50 (14%) 51 to 100 (4%) Over 100 (6%)

2012: Customers The top three ways SMBs plan to attract customers in 2012 are word-of-mouth,

repeat business and advertising/marketing

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25%

25%

22%

13%

11%

4%

What will be your primary source of getting customers in 2012? (Select one)

Word-of-mouth (25%)

Repeat business (25%)

Advertising and marketing (22%)

Networking (13%)

Social media (11%)

Other (4%)

2012: Social Media Next year, SMBs are evenly split on whether or not they will use social media

tools

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Yes 40%

No 40%

I don't know 20%

Will your company will use social media in 2012?

2012: Social Media The primary reason cited by SMBs for using social media is affordability. The

primary reason cited by SMBs for not using social media is perceived lack of

value

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0% 10% 20% 30% 40% 50% 60% 70%

Other

There’s a strong measurable impact on our business

Our business promotes social media in other types of marketing

I am personally comfortable using social media

This type of word-of-mouth is a great referral source

Our customers use social media

It is affordable

3%

20%

23%

44%

55%

56%

66%

Primary reasons for using (Select all that apply)

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Other

It is not affordable

Our business invests in other types of marketing

There’s no way to measure the impact on our business

I am personally uncomfortable using social media

Our customers don’t use social media

Our business relies on word-of-mouth as a referral source

I don’t see the value

7%

11%

12%

14%

25%

26%

37%

41%

Primary reasons for NOT using (Select all that apply)

2012: Social Media and Generational Use Of those surveyed, the respondents’ age correlates with their planned use of

social media tools in 2012

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75 or older

65 to 74 years old

55 to 64 years old

45 to 54 years old

35 to 44 years old

25 to 34 years old

18 to 24 years old

1%

5%

17%

22%

24%

26%

5%

6%

16%

26%

23%

16%

11%

2%

5%

15%

17%

32%

20%

11%

1%

2012 Planned Social Media Usage & Age of Respondent

Yes, we plan to use social media in 2012 No, we DO NOT plan to use social media in 2012 Don't Know

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Demographics & Appendix

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Top 10 Business Locations Breakdown of the top 10 states represented among respondents

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State Percentage

California 11%

Florida 8%

Illinois 6%

Texas 6%

New York 5%

Pennsylvania 5%

Ohio 4%

Arizona 3%

Georgia 3%

Indiana 3%

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Business Size / Decision-Makers

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27%

26% 13%

13%

13%

5% 4%

For which of the following would you consider yourself a

primary decision maker?

Operations (27%)

Administration (26%)

Communication/Marketing/Sales (13%)

Financial (13%)

Technology (13%)

Human Resources (5%)

Research and Development (4%)

39%

25%

6%

6%

6%

6% 5%

6%

Including yourself, how many are employed at your company?

1 (self-employed: 39%) 2 to 10 (25%)

11 to 25 (6%) 26 to 50 (6%)

51 to 100 (6%) 101 to 250 (6%)

251 to 500 (5%) 501 to 1,000 (6%)

Respondent’s Gender and Age

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Gender Percentage Male 50%

Female 50%

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Age Range Percentage 25 or younger 8%

26 - 35 20%

36 - 45 21%

46 - 55 18%

56 - 65 19%

Over 65 15%

Male 50% Female 50%

18-24 3% 25-34

17%

35-44 20%

45-54 24%

55-64 21%

65-74 11%

75+ 4%