NEW YORK Holding onto current sales and customers has jumped to the top priority for entrepreneurial operations like restaurants, surpassing such usual imperatives as growing the business, according to research released Thursday by American Express.
Small businesses hope to keep their clientele by emphasizing service as a point of difference, the charge card company indicated in its analysis of the study, which surveyed 768 business owners with fewer than 100 employees. The survey was conducted in August.
According to the study, 51 percent of the business owners reported working longer hours. In addition, 56 percent of respondents said they are reducing or accepting lower profit margins, and 55 percent acknowledged cash flow “issues,” compared with 49 percent who cited that problem last fall.
Roughly half of those surveyed said they would cut capital expenditures, while 46 percent said they would postpone outlays for marketing.
American Express explained that the research is the latest in an ongoing report, the American Express Open Small Business Monitor, that began seven years ago. It noted that the survey behind the new installment set several new benchmarks. For instance, respondents indicated that their capital investment plans are at an all-time low.
“The economic view of the last several weeks is shaking every business owner's view of the economy,” said Susan Sobbott, president of American Express Open, a component of the company that focuses on small businesses.
Small businesses, Sobbott continued, “are nimble” and have developed strategies to contend with the situation.
“They are decreasing investments, adjusting expansion plans to capital on-hand, cutting expenses and focusing on adapting to consumer demand,” she said.
Thirty-five percent of the respondents ranked maintaining current business levels as their top priority, compared with the 26 percent who cited that objective last fall, American Express noted.
Nevertheless, 74 percent of those surveyed said they intend to grow their businesses during the next six months. They’ve just made that a lower priority than holding onto current clientele, according to the data.
For the full study, click here.