SMBs Most Confident in Years

Tuesday, February 15, 2011
Posted by Brawlin Melgar


MerchantCircle survey shows better-than-expected holiday sales, increased optimism for growth in 2011

MerchantCircle, the largest online network of local business owners in the nation, today issued the results of its quarterly “Merchant Confidence Index (MCI),” a survey of over 8,500 local SMB across the country, sharing their confidence levels in the current economy as well as plans for future revenue, anticipated hiring and marketing spend. The outcome of the 2010 Q4 survey indicates economic sentiment among merchants has improved for the first time since the inception of the Merchant Confidence Index in September 2009.

The current MCI has jumped to 63.5 out of a possible 100, up 5.1 percent from Q1 2010.

"Finally, we are seeing glimmers of hope from merchants who have weathered the economic storm over the past year and are expecting a better economic landscape in 2011,” said Darren Waddell, vice president of marketing at MerchantCircle. “Our survey results show that for the first time in over a year, small business owners see their recent holiday revenue jump as an indicator for economic rejuvenation.”

Key survey findings include:
2010 holiday revenues surpassed expectations
• 2010 holiday sales turned out better than expected and well over 2009 sales
• 34.9 percent of merchants saw their 2010 holiday revenue “improve” or “improve significantly” when compared with their 2009 holiday revenue
• When surveyed on their holiday sales outlook in Q3 2010, only 27.9 percent expected to see any increase in 2010 year-over-year revenue

Merchants now cautiously optimistic about the economy, revenues
• The increase in revenue seen during the 2010 holiday season drove cautious optimism for future growth: merchants are now expecting to see a continued increase in revenue in 2011. 57 percent of SMB expect revenue to “improve” or “slightly improve” over the next three months
• When asked to rate the statement “The worst effects of the recession are behind us,” sentiment among merchants was significantly more optimistic than in Q3 2010. Nearly 27 percent of merchants believe that the worst has already passed as compared to Q3 2010, when only 19.2 percent indicated that the worst was over

Small gains seen in merchant hiring, marketing
• Cautious optimism is reflected in merchant hiring plans: over the next three months, 91.2 percent of merchants expect to keep headcount the same or plan to add jobs to their SMBs. This is up slightly from the previous quarter, when 86.4 percent of merchants expected to keep or increase headcount
• SMBs will also continue to spend money on marketing and advertising at their current or slightly increased rate. Nearly 85 percent of small business owners expect to increase or keep marketing expenditure the same over the next three months - an increase over Q3 2010 during which only 75 percent of merchants expected the same

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