This Week’s Reads…

This Week’s Reads…

What We’re Reading: Biometrics, Photo Bill Pay, Mobile Wallet

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom.

  • U.S. Bank Pushes Voice Biometrics to Replace Clunky Passwords

American Banker 

When U.S. Bank announced Wednesday that it’s testing voice biometrics for possible use by customers to access account information, it joined a line of banks that have been testing this technology, including Wells Fargo (WF) and Barclays. Voice biometric software users log in to an application or website by speaking a word or phrase. That word or phrase is compared to a previous recording the customer has made, to verify it’s the same user. Many industry observers have been saying for at least a year that the password is dead and more secure alternatives to authentication, such as voice biometrics and iris scans are needed to verify a user’s identity when banking online or via a mobile device. Some press accounts Wednesday stated that the goal for U.S. Bank’s pilot is to improve customer data security.

Read more

  • Mobile Photo Bill Pay Continues Shaky Start

Credit Union Times

Major players are investing in mobile photo bill pay as a natural next step to mobile deposit checking but the tool may have a long way to go to catch up with taking pictures of checks with smartphones. In the past year, 600 to 1,000 banks have installed mobile RDC and less than a dozen have done the same with mobile photo bill pay, said Bob Meara, an Atlanta-based senior analyst for the New York-based research firm Celent. “Mobile RDC is this wonderfully convenient invention and it scores highly on all the consumer surveys, but if you ask the same question about mobile photo bill pay, people just don’t get as excited about it, for a variety of reasons,” Meara said. “It’s just not as compelling.”

Read more 

  • It’s Time to Rise Above the Risk and Compliance Whining

Gonzo Banker

According to The Cornerstone Report, 7th Edition, bank assets per enterprise risk management FTE decreased from $147 million in 2010 to $55 million in 2012. Furthermore, the gap between median and 75th percentile performers was much wider than the gap between 25th percentile and median performers.

Read more

  • MCX and Paydiant Mobile Wallet – and Capturing the Consumer

Javelin Strategy & Research Blog

MCX announced it would be adopting the Paydiant mobile wallet, a cloud-based, white label platform. MCX is a consortium of 70 prominent brands with 110,000 locations representing over $1 Trillion in annual payments volume and 700,000 loyalty cards. MCX includes companies like Wal-Mart, Best Buy, CVS, Bed Bath & Beyond, Target, Exxon, Southwest, and today it extended to QSRs like Wendy’s. FIS, rated Javelin’s Best in Class Mobile Banking Vendor provides MCX with payment processing, routing and settlement for mobile commerce transactions.

Read more

  • Study finds small business mobile banking services lacking in US

Mobile Payments Today

U.S. banks need to make a greater effort to capitalize on their small business customers’ appetite for mobile banking services, according to research by Aite Group. This will involve providing their clients with business-specific mobile banking offerings instead of rebranded consumer mobile banking services, the U.S. consultancy says. In September 2013, Aite Group surveyed 1,003 U.S. companies with revenues of under $20 million for two reports: “Monetizing the Small-Business Opportunity” and “Why Banks Should Offer Mobile Banking to Small Businesses.” The survey found that about 32 percent of those businesses bank via mobile devices, according to Christine Barry, research director for Aite Group’s Wholesale Banking practice.

Read more 

  • Banks See More Confidence But Face Threat From New Providers

Wall Street Journal Blog

After a period of sharp decline coming out of the financial crisis, the banking industry has seen a rise in consumer confidence for two years in a row, according to a new survey of 32,000 banking customers in 43 countries. The study, by Ernst & Young, showed that globally, one-third of customers reported an increase in confidence in the banking industry compared to a year ago.  This marks a rise from Ernst & Young’s prior survey in June 2012, when just 22% reported an increase in optimism. In 2011, only 13% percent reported an increase in confidence in the banking industry, compared with 44% who reported a decrease.

Read more 

Barlow Small Office and Home Office Study: Mobile and Payments

There is a significant business market that is being ignored by almost every major bank. Many know this market as the small office/home office (SOHO), non-employer or personal business segment — generally thought to be businesses with less than $100,000 in annual sales revenue.

Today, November 14th, at 1:00 pm ET/10:00 am PT, we will host a #SOHOStudy Twitter Town Hall with colleagues from  Barlow Research and Digital Insight. In advance of this event we wanted to share some insights from Barlow’s research on mobile and payments.

Let us know what you think about the data and we look forward to seeing you on 11/14 at 1:00 pm ET. If you have not yet registered yet, you can here.

Please view the infographics below and download a PDF with additional data here.

Barlow SOHO Study Mobile Infographic

Barlow SOHO Study Payments Infographic

Banking.com, Barlow Research and Digital Insight to Host Twitter Town Hall on November 14th

Banking.com and Barlow Research SOHO Twitter Town Hall

In conjunction with Barlow Research and Digital Insight, we will host a Twitter Town Hall on Thursday, November 14th to discuss Barlow Research’s recent study of the Small Office/Home Office (SOHO) market. The Twitter Town Hall will discuss the survey results and how they tie into current banking trends, including  financial management, payment and credit card behaviors, mobile and digital banking habits.

Barlow Research recently completed a comprehensive, multi-sponsored study that gathered the information needed to segment the SOHO market, examine their financial management, payment and credit card behaviors, measure the value of the SOHO customer, analyze product usage and explore business Internet banking and mobile device habits. Banking.com will be hosting a Twitter Town Hall to discuss the study results, how banks are currently serving consumers and answer any questions about the study.

The Twitter Town Hall is open for all our readers to join and participate in the conversation. To join us and/or learn more about the event, see below

Steps to Join:

  • Twitter Town Hall: Go to www.tweetchat.com. Log in using your Twitter ID.
  • Enter the hashtag to join the conversation: #SOHOStudy
  • You can also follow the hashtag (#SOHOStudy) using Twitter applications such as Hootsuite or Tweetdeck 

Details:

  • Date: Thursday, November 14th
  • Time: 10:00 am PST/1:00 pm EST
  • Hosted by: Banking.com Staff (@bankingdotcom), Joel Mueller, Research Analyst, Barlow Research (@BankingResearch), John Barlow, President, Barlow Research (@JohnRBarlow) and Digital Insight (@Digital_Insight)
  • RSVP/Add to your Calendar: You can register for the event via Eventbrite and add a reminder to your calendar. See Eventbrite link here

Additionally, if you are interested in submitting a question prior to the Twitter Town Hall, please DM us on Twitter.

We hope to “Tweet” with you on November 14th!

For more on the study, visit our earlier posts on the topic.

 

The Haves and the Should-Haves

Small business and younger, tech-savvy consumers—these are two market segments that couldn’t be more different. Yet for our purposes, at least, they could be seen as representing two sides of the same coin. For both, there are big obstacles and even bigger opportunities. The key to success on both fronts is to get smarter about what we’re doing.

First, consider the sheer size of the small business market. In a word, it’s big. In fact, with $6 trillion in revenue each year, it’s the second largest economy in the world. That is one huge pie, with profitability enough to go around for everybody. That said, it’s only a ‘market’ in the loosest sense of the term—with some 28 million companies around, it’s too diffuse to identify specific patterns. Besides, it’s a target that’s constantly moving. Thanks to the constant emergence of new online and mobile capabilities, routine best practices and fundamental human behaviors alike keep shifting.

But here are some numbers that should stick with us. Only 14% of small business owners currently use their financial institution’s cash management/business banking solutions. Sad as that sounds, our customers spend 5.4 billion hours each year doing taxes (it takes less time to produce every car, truck and van in the country). And finally, let it be noted that a stunning 66% of small business owners still use personal bank accounts for business.

So that’s what they’re not doing. To get a snapshot of what they could be doing, consider the generational shift. A Digital Insight study of 27 financial institutions found that 84% of mobile bankers fall into what we call the ‘Gen Y’ and ‘Gen X’ categories (to make some of us feel a little older, remember that Gen Y alone will account for close to half of the nation’s personal income within the next 10 years.) This is one ripe demographic.

And how does this translate into tech-savvy behavior that benefits them and us? Online banking customers have 13% more accounts than their offline counterparts. In fact, online banking customers conduct 59% more debit card purchases and have a 7% higher annual retention than offline customers. Going one level deeper, consider the difference in log-ins: for online banking users, the number is 9.73; for online and mobile users, it’s 18.87; and for online, mobile and tablet users, it’s 29.05.

We may be sick of hearing it, but mobile is a particularly big deal. These consumers conduct 40% more monthly debit card purchases than online non-mobile consumers. Even more significantly, mobile consumers access their financial information 65% more frequently than online non-mobile users.

Underlying all these changes is an even more fundamental shift, and it’s from consuming credit to managing cash. Basically, business customers of every kind want simplified workflows with greater access to financial information and tools, ranging from payments capabilities to asset management. Do traditional cash management solutions do the job? Or are they too complex to meet emerging business needs?

Now for the good news. Nearly 80% of consumers name their bank or credit union as their most trusted online destination to manage finances. According to the Tower Group, business owners’ use of online financial services has risen 17% in just the past year. Online services are among the top three reasons businesses choose their financial institution in the first place (but we warned: Barlow Research tells us that nearly half of business online banking customers would switch banks for better online banking functionality).

So here’s the future of financial management. To get smarter about profitability, credit unions must get to manage every facet of customers’ financial lives. There’s a ton of research telling us this—of the 88% of consumers who now pay bills and transfer funds online, 62% would like a single place to manage their complete financial picture, regardless of where the information originates, and an unbelievable 94% of TurboTax for Online Banking users who used direct deposit for their refund sent it directly to their host financial institution.

It’s easy to get overwhelmed by all the changes taking place in our customer base. If the move to online banking was a big change, then the adoption of mobile tools and services is a seismic shift. Yet the wealth of data we have at our fingertips also offers a clear view into the multitude of opportunities that comes with that transformation. Consumers who actively use technology-enabled services, particularly those offered through mobile channels, undeniably represent higher account ownership, balances, retention, and debit card purchases. They will find, join and be loyal to financial services providers that offer customizable tools and services to meet a wide range of evolving needs. The onus is on us to get smarter about how to meet those needs.

How to Crack the Code to Serve Small Businesses Well

We all know that small businesses are very important to financial institutions, since they provide more profitable relationships than consumer accounts. But here’s the problem: More than three-fourths of all small businesses (21 million) have no employees, operate out of the owner’s home and have less than $500,000 a year in revenue.1  So it’s hard to know who these business owners are and how to service them.

Many small businesses look and act like consumers to their financial institutions. The owners use their consumer accounts because it’s convenient — and they don’t know what small-business banking products can do for them. But if you can discover these business owners, you can provide the products and services they need to be successful.

Payments and account control/security are big pain points for small businesses.

25 percent of small-business online banking users view entitlements as a very important or top-priority solution.2 Plus, we’ve found that 71 percent of customers strongly agree that entitlements save them time by delegating online banking tasks to others, and 71 percent say that entitlements make them feel more secure about giving others access to accounts.3

70 percent of small businesses consider ACH and wires to be an important functionality for online banking.65 percent of all small-business payments are electronic, and this percentage is expected to grow as small businesses get more access to the right products.

Another issue for financial institutions is the Goldilocks and the Three Bears syndrome…small business offerings are either “too big” or “too small” but not “just right”.  Financial institutions simply don’t know where to put small businesses, so those businesses stay on the retail platform with its limited functionality or they are migrated to a cash management platform that’s too big and too expensive for what they need.

Recent Barlow research indicates that 50 percent of small office/home office businesses (SOHOs) are on a retail banking platform and the rest are on a business banking platform. With digital banking that’s designed for small businesses, you can introduce your small-business customers to new services and start generating fees as they take advantage of the new capabilities you offer.

Like Goldilocks, small business owners are realizing that most solutions just don’t “fit” them. 74 percent of small-business owners say they aren’t wowed by their financial institutions.4 That’s why many are threatening to take their business elsewhere.

Finding the right-sized solution for small businesses can be hard, but so is monetizing these relationships.  The good news is that there is an opportunity to generate fees by offering solutions they are willing to pay for (small-business payments) and creating small-business-specific account bundles and packages that add value to their banking relationships.

What’s your small-business strategy? What would help you serve small businesses better? What are your top successes and/or issues in servicing small businesses?

About Dianna Morton: Senior Marketing Manager for Small Business Online Banking Solutions
Dianna is an experienced marketer who has led innovative and complex marketing programs focusing on the small business segment for over 15 years.  She joined the Digital Insight team (previously Intuit Financial Services) in 2011 and has brought with her extensive knowledge and experience about the small business industry and how to help financial institutions acquire, engage and grow their small business customer base. Prior to Digital Insight, Dianna also worked at Merrill Lynch Credit Corporation, Harke-Hanks Direct Marketing and Beneficial Finance where she drove and executed successful marketing programs. Dianna holds a Masters of Business Administration from University of North Florida and a Bachelor of Science in Business Administration degree from Towson University.

References: 
1 Barlow SOHO Opportunity Study 2013 and U.S. Census Bureau, 2010
2 Barlow Research Associates Business Internet Banking Study, 2012
3 Digital Insight entitlement beta results
4 Aite Group, Aug. 2011

 

Q&A with Barlow Research about the Small Office/Home Office (SOHO) Market

We got the opportunity to speak with John Barlow, President, Middle Market Banking Program Director, at Barlow Research about the Small Office/Home Office (SOHO) market. Barlow Research recently completed a comprehensive, multi-sponsored study that gathered the information needed to segment the SOHO market, examine their financial management, payment and credit card behaviors, measure the value of the SOHO customer, analyze product usage and explore business Internet banking and mobile device habits. For more on the study, visit our earlier post and infographic.

Q: Why is the SOHO market the fastest growing business segment in the U.S. and how can banks take advantage of this opportunity?
A:
From 2002 to 2010, the SOHO market had a 25 percent growth rate and now includes over 20 million entities nation-wide. Residual effects of the recession, such as increased unemployment and involuntary part-time employment, have aided in the growth of this market by increasing the number of people who started their own businesses because they had their hours cut, had been laid off or had to find supplemental employment. Another fundamental facilitator in the growth of the SOHO market is the rising costs of having employees and the decreasing cost of technology. With the technological advancements in the past 10 years (increased Internet functionality and mobile capabilities), starting and sustaining a SOHO business has become much more feasible, allowing many Americans to run small firms to supplement their income or generate earnings from a passion or hobby. Lastly, with the baby boomer generation nearing retirement age, retirees may be looking to do something they are passionate about while simultaneously supplementing their retirement savings. Nearly a quarter of the SOHO population is 65 years or older.

Banks already have an advantage in the SOHO market: approximately seven in 10 business customers are SOHOs that are already in the bank. Taking advantage of this market comes down to learning how to provide adequate service to this market to maximize its potential.

Q: What financial/banking advice would you give someone looking to start a SOHO?
A:
Many SOHOs would benefit from help with the “business part” of being a business, which often includes putting together the paper work to become a legal entity, figuring out tax requirements, tracking expenses and bookkeeping. Individuals interested in starting a SOHO firm should document their vision. Write down what their intentions are as a business (or not-for-profit), define their goals and determine how they intend to meet their goals. Because this market is so diverse, each SOHO will have different expectations and different measures of success. With a baseline business plan mapped out, it will be easier to talk to people about their firm and discuss their intentions with financial institutions.

Q: What are the top products and services they need from a bank?
A:
Providing ways to make business operations simple and easy is key in the SOHO market. This may include offering or educating SOHOs on products such as online banking, mobile banking, mobile remote deposit capture, etc. Also, providing SOHOs with products to help perform tasks such as managing cash flow, keeping records, organizing receipts to track expenses and collecting receivables is important. Since the SOHO market is comprised of predominantly non-employer businesses and over a third of SOHO owners have another job, time is of the essence. The owners of these small firms have to wear many hats. One of these hats is that of accountant and bookkeeper – a role that requires time and a certain level of skill and expertise. Providing a simplistic solution to this pain point will be welcomed. It is important to know that often it isn’t always about providing a specific product as much as providing the right product at the right time. When a buying opportunity presents itself, there needs to be a product that is simple and intuitive for this market to purchase.

Q: What are some traits a SOHO should look for when seeking a banking partner?
A:
A SOHO may want to seek a banking partner that provides information quickly, uses language SOHOs understand, provides simple and concise solutions and operates transparently. When a SOHO owner walks in the door they need to be able to say, “This place is for me.” SOHOs want to know that their bank understands them. This may be difficult for financial institutions because each SOHO is unique and their individual needs in a banking partner will vary greatly. However, there are simple ways financial institutions can relay that they value a SOHO’s business. This includes being responsive, treating them as a valued customer and being easy to do business with.

Q: How can banks ensure loyalty when working with SOHOs?
A:
To effectively serve the SOHO market, financial institutions need to understand the entire customer relationship, not just the SOHO business relationship. Seventy percent of SOHOs have a personal relationship at the same bank as their SOHO firm. Furthermore, it is common for SOHOs to own other businesses or re-appear at the same bank as a different business if their initial SOHO firm closes. Even though a singular SOHO relationship may appear minuscule, the consumer relationship and/or other business relationships associated with each SOHO must be considered when evaluating the contribution a SOHO makes to the bank.

With the SOHO segment being as large as it is, small shifts in bank switching activity may be significant, so maintaining a loyal SOHO customer base is important. The average SOHO business relationship with their primary financial institution is 11 years on average. Given the tenure of this relationship and personal connection to their primary bank, it is not surprising that being treated as a valued customer is very important to this segment. However, only 50 percent of SOHOs believe their primary bank knows and understands their firm. Efforts to understand your SOHO customers and recognize their firm may help demonstrate that your financial institution values their business.

Q: How can banks increase their profitability by servicing SOHOs?
A:
The SOHO market has been overlooked by the banking industry because many believe there is no value proposition. However, SOHOs appear to look for value first and consider cost second. For this reason, focusing on the SOHO segment can be a profitable endeavor for a financial institution. The needs of a typical SOHO business are simple, but the products they need are in different organizational silos throughout the bank. Herein lies the fundamental problem when it comes to servicing the SOHO market; most banks are simply not organized in a way that caters to the needs of these small firms. Without a fixed place for these small firms and a strategy for recognizing and servicing them, SOHOs are easily lost and the opportunity for the bank ceases to exist.

Individually, SOHO firms do not have high net potential revenues per relationship in terms of fee and balance income. However with the size of the SOHO segment being as large as it is, the net potential revenue of the entire segment is more valuable than the middle market ($10MM-<$500MM in sales). Many SOHOs are planning to remain at their primary bank. Therefore, mining the SOHOs that are already affiliated with your financial institution before focusing on attracting additional SOHO customers and offering simplistic, low-cost business solutions is going to be the more effective strategy. Pairing a segmentation strategy with a deeper understanding of the financial behaviors of the SOHO market is the only way to target profitable relationships and develop a strategy for servicing these small firms.

Q: How can banks tailor their services to provide options for a diverse range of businesses?
A:
Although it is important to know and understand your SOHO customers and be an expert in the SOHO market, it is far more important to be an expert in the banking business. Offer simplistic solutions that support fundamental business operations and minimize pain points. There is not a one-size-fits-all product for this group. Many financial institutions often feel like they already service the SOHO segment because they “offer a free checking product.” Unfortunately, it’s not that simple. The SOHO space is as diverse as it comes and it not only takes collaboration among silos within the bank but a commitment to the SOHO market at an organizational level. Most banks may already offer the products needed to service the SOHO market, but don’t know the pain points within each SOHO segment to provide solutions.

Q: How can banks best market their SOHO expertise?
A:
The line between consumer banking and SOHO banking is often blurred; so marketing business banking offerings to your consumer banking customer base will provide education to the right population of current and future SOHOs. Many banks have a misconception that their SOHO customer base is content with the current consumer products they use. This isn’t entirely true – SOHOs may simply be unaware of the various business products and services that are offered by their primary bank. This could be because most business products are not targeted specifically to this market.

Getting in front of this segment will require advertisements in their common market places and through networking/communication channels frequented by SOHOs such as blogs and social media. Having a SOHO location on a bank’s public-facing Web site and branch signage also creates an inviting business space for SOHOs.

About John Barlow: John Barlow, President, Middle Market Banking Program Director
John Barlow_Barlow Research John Barlow was a founder of Barlow Research Associates, Inc. in 1980 and is responsible for overall business strategy and research methodology.  In his position he works with clients to understand their strategic needs and develops research methods for multi-client and proprietary research assignments. John graduated from the University of Iowa in 1972, and is a graduate of the ABA School of Commercial Lending and past President of the Minnesota Chapter of the Bank Marketing Association. Prior to Barlow Research he worked for Norwest Bank where he was a commercial lender and manager of marketing activities for the commercial, international and trust divisions of a regional bank. John and his wife Kathy, also a principal in the company, live on Lake Minnetonka near Minneapolis. He is an avid E-scow sailor.

 

 

The Chinese Banking Syndrome

There’s nothing as representative of capitalism as the financial services industry. There’s nothing as representative of communism as China. And when those forces meet whether to collaborate or collide—it can be fascinating to watch.

The most visible symbol of that dichotomy right now is the high-profile trial of former high-ranking politician Bo Xilai. It’s technically not directly related to financial services, though he was previously Minister of Commerce and the charges he’s facing have mostly to do with bribery and corruption. The more interesting connection is between free markets—a basic tenet of capitalism—and the stranglehold the Chinese government has on every aspect of business life.

In fact, Bo racked up an impressive economic record during his stints in public office. He aggressively pursued foreign investment by lowering income taxes and his efforts are credited with leading to a much higher GDP in his districts than the national rate. (It was also tagged as ‘red GDP,’ indicating heavy government subsidies.) None of this is likely to help in his trial, however—according to a U.S. State Department report, the conviction rate for criminal trials and their appeals reached 99.9% in 2010. The tight Communist party control over police, prosecution and the courts is apparently quite effective.

Stepping back a little, the broader financial picture is just as conflicted, and getting more so. As the Wall Street Journal pointed out recently, there was a time when it was much easier to track the economy. All China-watchers had to do was monitor the volume of loans issued by banks every month. Those days are certainly gone.

In the past few years, with serpentine maneuvering that would make Wall Street veterans envious, banking industry executives have employ increasingly complex tactics to spread the wealth around without public scrutiny. Along the way, in scenarios that mirror battles being fought by free-market counterparts, they’ve run headfirst into Chinese regulatory agencies.

As covered on this blog previously, the problems stem partly from the Chinese government’s decision to place stringent restrictions on loans to SMBs, which led to the rapid growth of a ‘shadow banking’ market. These trust companies and short-term financing arrangements naturally feature significantly higher interest rates than traditional modes of lending—a potential recipe for corruption and even violence. The more recent problems, however, go much deeper.

As these alternative financial models became increasingly common, larger banks got involved, in the process keeping their true credit records off the books. By 2011 the China Banking Regulatory Commission (CBRC) had cracked down, forcing banks to go back on the record about their true credit histories. So the banks switched gears, opting for wealth-management products involving bonds, index futures and so on. These were, as the name suggests, designed specifically for high-net-worth individuals. When the CRBC stepped in here as well, financial institutions deployed even more byzantine strategies to stay undercover, such as categorizing corporate loans as interbank loans.

It’s unclear just how much there is floating around out there precisely because it’s all in the shadows. But it’s important to stay abreast of this imbroglio because China is so important to the global economy right now, and so many Western banking institutions are looking for greater access to the market.

There are major potential downsides here—just this month, news leaked that Wall Street conglomerate JP Morgan Chase is being investigated by the U.S. Securities and Exchange Commission for hiring ‘princelings,’ the children of high-ranking Chinese government officials, to sweeten their bid for a share of the massive China market. It’s also by no means the only institution to face these challenges. Sure, outright bribery is expressly prohibited by the Foreign Corrupt Practices Act, but is favoritism of this kind illegal?

We don’t have all the answers yet, and it’s going to be a long time before we do. But some essential truths are inescapable: China is a huge business market, currently holds a great deal of U.S. debt, and will maintain a defiantly socialist posture while allowing (some) free-market policies. Somewhere inside that tangled web there is the potential for real reform and economic growth. Companies that can learn to walk that fine line will reap tremendous benefits.

Fast Facts: National Small Business Week

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more. This iteration focuses on Small Business Week, a local and national event celebrating small business in the United States.

This year marks the 50th anniversary that the U.S. Small Business Administration has been highlighting the impact of small business owners and entrepreneurs through National Small Business Week.
FACT: President Obama declared June 16-22 National Small Business Week, calling small business the economy’s engine and our biggest source of new jobs. This year marks the 50th anniversary that the U.S. Small Business Administration has been observing this event.

FACT: In the United States, there are an estimated 27 million small businesses, which outnumber corporations 1100 to 1.

FACT: One-third of small businesses rely on credit for financing and 60-80% of new jobs come from small businesses.

FACT: In 2010, small and medium-sized enterprises accounted for 97.8% of all U.S. exporters and 97.2% of importers.

FACT: Small businesses are innovators and produce 16.5 times more patents per employee than large firms.

FACT: 73% of small business owners feel successful and 47% are optimistic about the national economy improving this year. 44% of owners feel more confident about their local economy than the national economy, 23% feel more confident about the national economy than their local economy and 33% were not confident about either.

FACT: There is still work to do–There is a hiring standstill among small businesses, as 68% of business owners have not hired in the past year and 63% do not plan to hire in the next year.  Of business owners who have hired in the past year, 70% hired only one or two employees.

FACT: Small business owners who have not hired in the past year say they cannot afford to, their business isn’t growing, or they are taking on additional responsibilities themselves; only 14% cited a lack of qualified talent.

FACT: Since 1963, the U.S. Small Business Administration has highlighted the impact of outstanding entrepreneurs and small business owners through events across the country.  This year’s events will be held June 17-21, in Seattle, Dallas, St. Louis, Pittsburgh and Washington, D.C. and will offer tips, tools and training for small businesses to start, succeed and grow.

FACT: Small business owners will contribute to National Small Business Week by participating in online panel discussions on hot topics like social media and business financing starting daily at 4pm ET. All events will be streamed live.

FACT: Small Business Week 2013 sponsors include Northrop Grumman, Raytheon, Microsoft, National Association of the Self Employed (NASE), Arlington Texas Chamber of Commerce, AT&T, ADP, Western Pennsylvania Small Business Network, Staples, Dun & Bradstreet Credibility Corp., Visa, Women Impacting Public Policy, Lockheed Martin, National Association of Government Guaranteed Lenders, Business Forward and Office Depot.

 

You can view all previous Fast Facts at www.RoundtableResearch.org.

Copyright © 2013 The Financial Services Roundtable, All rights reserved.