Companies are optimistic about revenue for 2015, with 57 percent reporting they plan to see sales to increase this year according to the 2015 State of Small Business Report. This thinking is in line with what economists predict as America continues to recover from the economic tough times it's recently faced. The State of Small Business Report, conducted by WASP Barcode Technologies, found that product-based companies were more optimistic than service-based, with 41 percent of product businesses expecting revenue growth of five percent or more in 2015.
Despite that optimism, however, SMBs see increasing revenue as the biggest challenge they face. Businesses are looking at a variety of ways to grow their revenue streams in the coming months in order to maximize profits. Participants in the survey listed several ways they'll reach out to customers this year.
Attracting and Retaining Customers
Customers are at the heart of every business's success, and it's far less expensive to retain existing customers than to attract new ones. Perhaps this is why customer retention is a top priority in 2015. Fifty-six percent of those surveyed say improving the existing customer experience and customer retention is the top strategy they intend to use to increase revenue this year.
Acquiring new customers is a priority, as well, however, with 45 percent of businesses stating they'll invest in new customer acquisition activities and methods. While respondents acknowledge the importance of reaching out to new customers, many are still hesitant to set aside a significant portion of their annual budgets to put toward marketing.
Expand into New Markets
Untapped markets are a top priority for brands in 2015, with 28 percent of brands saying they'll expand into new markets this year. The Internet and social media have given brands the ability to reach customers in new regions, even for a locally-based business. These new markets may not be regional at all, since brands can expand by simply reaching out to a new demographic.
Interestingly, though, this expansion doesn't include the lucrative emerging markets located across the globe. When asked if they plan to expand globally, 82 percent of respondents reported no current plans to do so. Ten percent of the remaining group state they've already expanded globally while only two percent report planning to make that expansion within the next year.
Expand Offerings
When trying to grow, a business can either continue to make the products that have or add new ones to the mix. New products are a top priority for 22 percent of participants, who will consider launching something new within the next year to bring more revenue in.
Despite a desire to grow, SMBs don't seem to see offering additional locations as a benefit. Only six percent of those surveyed say they'll open new stores or facilities in 2015. This could in part be due to the Internet's power to help businesses sell items without having to lease additional space.
Improve Internal Resources
Human resources is a top priority for many businesses, with employee productivity being a prime target. 20 percent of respondents report they'll invest in training to improve worker productivity this year, perhaps because SMBs are realizing the value of retaining the employees they have, as recruiting has become a priority for businesses seeking to increase revenue in 2015.
Thirty-eight percent of respondents say they plan to hire employees this year, which is good news for the many employees interested in landing a good job this year. And giving employees what they want is critical to keeping them. "While fun perks like massages in the office or bring-your-pet-to-work day may get the headlines, in reality most employees care about basic benefits such as health insurance and retirement plans," explains Sam Meenasian, partner at Business Insurance USA. In fact, a Towers Watson survey found a clear link between the quality of a company's benefits and its ability to retain employees. "Employers whose benefit programs meet employees' needs enjoy a significant competitive advantage in attracting and retaining employees, especially employees with a long-term outlook."
Takeaways
This report highlights the optimism many small businesses have as 2015 begins. With the economy gradually improving, SMBs have a prime opportunity to reach out to new consumers and convert them into return customers who will continue to buy from them for many years.