Small Business Owners Plan To Expand Operations In 2011

More than half (57%) of small business owners say they plan to make changes in 2011, with 43 percent planning to expand their business operations, according to a new Wells Fargo/Gallup Small Business Index survey. Among those looking to expand, 56 percent say they will add new employees.

Looking back at 2010, 51 percent of business owners with paid employees say that they hired new employees. Forty-one percent of those business owners who hired did so to replace an employee who left; another 21 percent were hired to support growth or expansion plans. Of the business owners who hired in 2010, 42 percent say they hired fewer new employees than they needed. Business owners foresee a somewhat better employment outlook in 2011: 18 percent say they expect hiring to increase at their companies over the next 12 months, up from 13 percent in Q3 2010.

This year, while cost cutting remains a top concern (64 percent), other more forward-looking priorities have gained ground, including being more involved in communities (43 percent), planning a succession strategy (42 percent), and increasing advertising and public relations (40 percent). Using social media and increasing investments in technology are also cited as high priorities by approximately a third of those surveyed.

The most pressing concern was retirement and succession planning, with 64 percent saying they worry about putting enough money away. However, 57 percent indicated that saving for retirement is actually a low priority for the coming year – evidence that many business owners may still be facing considerable financial stress.

“Business owners continue to focus on their financial health and appear to be heading into 2011 with cautious optimism about business growth prospects,” said Doug Case, Wells Fargo Small Business Segment Manager.