2010 Survey of Small Business Owners - ADP.com

THE BUSINESS BEHIND BUSINESS®

2010 Survey of Small Business Owners

ADP RESEARCH INSTITUTE

October 2010


BACKGROUND AND METHODOLOGY

2

In September 2010, ADP Research Institute surveyed a broad cross-section of the small business

sector to assess the views of small business owners on a variety of topics related to the economy,

business outlook and opportunities for growth.

Eight online web surveys were conducted between September 21-29, among representative and

mutually exclusive samples of U.S. companies with 1-49 employees that have a formal payroll

system:308 small business enterprises across industries (referred to as multi-industry in this report)

119 retail sales enterprises

116 construction enterprises

114 medical practices

111 financial services enterprises

78 accounting practices

72 insurance enterprises

59 law firms

Qualified respondents are purchase decision-makers for their establishments’ systems/services in

payroll, HR and benefits. Specifically, respondents include Presidents/CEOs/Owners/Partners,

CFOs/Controllers, EVPs/SVPs/VPs/General Managers and Directors/Managers. Quotas were set

by employee size groups to ensure that the sample reflected the profile of all small businesses in

the U.S., as reflected in ADP’s in-house database, which combines Dun & Bradstreet and the

Yellow Pages. Once the data came in, the industry profile of the study sample was compared to

ADP’s database to ensure that no industry group was over- (or under-) represented.


KEY FINDINGS

3

Small business owners are optimistic about business prospects in the year

ahead, but closely link anticipated growth with the implementation of new

operational efficiencies.

• A majority of small business executives expect their business to expand

moderately to significantly over the next 12 months (slide 8).

Small business owners spend a significant amount of time on administrative

tasks (e.g., payroll, HR and benefits administration) – time they believe would be

better spent on tasks related to running and/or growing their businesses.

• Participants report that they would devote more time to ―running the business,‖

and ―building the business‖—revenue-generating activities that may lead to an

increase in company revenue—if they did not have to spend as much time on

administrative tasks (slide 12).

• More than one-third of those who manage payroll in-house believe that

redeploying time spent on this task to other activities would lead to an increase

in company revenue (slide 13).


KEY FINDINGS

4

In an effort to maximize time and opportunities for growth, small business

executives are spending a significant amount of time outside of the office and,

for many, their time spent “on the go” is increasing.

• Small business executives spend approximately nine hours a week on

business-related matters, and half of this time is spent on administrative tasks

(slide 21).

• Of those executives who spend time outside of the office for business, three

out of 10 believe that time is increasing (slide 22).

Smartphones are currently a frequent companion to small business owners

nationwide and are looked to for their ability to enhance and ease critical

business functions.

• Smartphones are already frequently used among small business executives –

more than half own a Smartphone or mobile device (slide 17).

• Most of those who own a Smartphone use it for business purposes (slide 18).

• Most of those who already own and use a Smartphone for business (or plan to

do so) also indicate an interest in using the device to aid with administrative

tasks (slide 19).


ECONOMIC IMPACT


ECONOMIC IMPACT

6

What impact has the 2008-2010 economic climate had on your business?

Not surprisingly, the 2008-2010 economic climate has negatively impacted the

majority of participants’ businesses. Only Insurance and Financial Services

reported significantly* higher positive results than the other industries.

3%

5%

1%

2%

3%

4%

3%

4%

3%

12%

11%

5%

13%

20%

24%

23%

8%

12%

8%

13%

50%

59%

56%

56%

47%

53%

56%

51%

31%

18%

17%

12%

42%

23%

24%

29%

0% 20% 40% 60% 80% 100%

Retail Sales

Medical Practice

Law Firm

Accounting

Construction

Financial Services

Insurance

Multi-Industry

Extremely Positive Somewhat Positive No Impact

Somewhat Negative Extremely Negative

Multi-Industry: n=308

Insurance: n= 72

Financial Services: n=111

Construction: n=116

Accounting: n=78

Law Firm: n=59

Medical Practice: n=114

Retail Sales: n=119

*Insurance and Financial Services participants reported a ―somewhat positive‖ impact significantly (at least 90%) more often

than all other industries.


FUTURE OUTLOOK


FUTURE OUTLOOK

8

Over the next 12 months, do you expect your business to...

A near or clear majority of small business owners across many industries expect

their business to expand at least moderately, if not significantly, during the next

12 months.

3%

3%

3%

5%

3%

5%

4%

5%

42%

39%

44%

42%

39%

50%

54%

47%

38%

40%

37%

39%

30%

28%

31%

35%

4%

11%

10%

12%

16%

13%

8%

7%

3%

3%

3%

3%

1%

1%

0% 20% 40% 60% 80% 100%

Retail Sales

Medical Practice

Law Firm

Accounting

Construction

Financial Services

Insurance

Multi-Industry

Expand significantly Expand moderately No change Contract moderately Contract significantly


Insurance: n= 72


Construction: n=116

Accounting: n=78

Law Firm: n=59


Retail Sales: n=119


PAYROLL MANAGEMENT


PAYROLL MANAGEMENT

10

What percent of your total working time do you spend on payroll, human resources and employee

benefits administration?

The vast majority of participants spend 29% or less of their work time on payroll,

HR and benefit administration.

1%

2%

1%

2%

5%

3%

4%

7%

7%

2%

3%

4%

3%

2%

7%

4%

13%

7%

12%

4%

91%

95%

90%

89%

91%

91%

86%

90%

Insurance

Accounting

Financial

Construction

Law Firm

Medical

Retail

Multi-Industry

More than 80% 51-79% 30-50% 29% or less


Insurance: n= 72


Construction: n=116

Accounting: n=78

Law Firm: n=59


Retail Sales: n=119


PAYROLL MANAGEMENT

11

33%

39%

28%

14%

17%

38%

29%

25%

46%

44%

40%

31%

22%

21%

46%

42%

43%

40%

53%

56%

61%

40%

54%

50%

17%

33%

16%

16%

15%

31%

15%

22%

6%

8%

4%

9%

7%

5%

6%

6%

Insurance

Accounting

Financial

Construction

Law Firm

Medical

Retail

Multi-Industry

Spending time with clients/customers Building the business Running the business Spending time with family/friends Don't know

Which one of these activities would you spend the most time on?

If participants did not have to devote as much time performing administrative

functions, they would devote most of their extra time to running or building the

business.


Insurance: n= 72


Construction: n=116

Accounting: n=78

Law Firm: n=59


Retail Sales: n=119


PAYROLL MANAGEMENT

12

39%

29%

21%

27%

29%

22%

10%

16%

8%

13%

12%

9%

4%

4%

4%

2%

46%

44%

52%

41%

39%

54%

7%

19%

19%

16%

12%

Accounting

Financial

Construction

Medical

Retail

Multi-Industry

Increase revenues 1-5% Increase revenues 6-10% Increase revenues more than 10% No impact on revenues Don't know

If you could re-deploy the time that you and your staff spend on payroll toward revenue-generating

activities, what would be the impact on our company revenues?

More than one-third of those who manage payroll in-house believe that

redeploying time spent on this task to other activities would lead to an increase in

company revenue.



Construction: n=75

Accounting: n=78


Retail Sales: n=69

•There is no data to report for Law Firms or Insurance groups due to the limited sample size.


PAYROLL MANAGEMENT

13

When you think about managing payroll in-house, how concerned are you about each of the

following aspects?

At least half of participants across industries who process payroll in-house (using

a PC or by hand) are at least moderately concerned about payroll efficiency,

accuracy, reliability and accountability.

57%

54%

52%

59%

67%

48%

57%

66%

52%

45%

69%

52%

57%

55%

58%

60%

67%

55%

55%

54%

48%

49%

62%

49%

Retail Sales

Medical Practice

Accounting

Construction

Financial Services

Multi-Industry

Accuracy Efficiency Accountability Reliability

•Reflects the combined total percentage of participants who answered that they were moderately, very or extremely

concerned with each attribute.




Construction: n=75

Accounting: n=52


Retail Sales: n=69


PAYROLL MANAGEMENT

14

Now please rank the items below, using 1 through 4, where 1 = most important concern and 4 =

least important concern.

When asked about their most important concern, accuracy was most frequently

ranked number one.

46%

59%

48%

53%

42%

54%

19%

11%

17%

13%

24%

15%

17%

11%

12%

13%

24%

19%

17%

20%

23%

20%

9%

12%

Retail Sales

Medical Practice

Accounting

Construction

Financial Services

Multi-Industry

Accuracy Efficiency Accountability Reliability

•Reflects the percentage of participants who answered number one.




Construction: n=75

Accounting: n=52


Retail Sales: n=69


MOBILE DEVICES


MOBILE DEVICES

16

Do you currently use a Smartphone/mobile device?

More than half small business executives own a Smartphone or mobile device.

56%

57%

56%

53%

60%

65%

65%

61%

45%

43%

44%

46%

40%

35%

42%

39%

1%

1%

4%

0% 20% 40% 60% 80% 100%

Retail Sales

Medical Practice

Law Firm

Accounting

Construction

Financial Services

Insurance

Multi-Industry

YES NO Don't Know


Insurance: n= 39


Construction: n=116

Accounting: n=78

Law Firm: n=59


Retail Sales: n=66


MOBILE DEVICES

17

Do you currently use a Smartphone/mobile device for business?

Of those with a Smartphone, the vast majority of participants use their

Smartphone/mobile device for business.

82%

65%

70%

78%

71%

88%

85%

82%

18%

35%

30%

22%

29%

13%

15%

18%

0% 20% 40% 60% 80% 100%

Retail Sales

Medical Practice

Law Firm

Accounting

Construction

Financial Services

Insurance

Multi-Industry

YES NO


Insurance: n= 39


Construction: n=69

Accounting: n=41

Law Firm: n=33


Retail Sales: n=66


MOBILE DEVICES

18

Suppose that you could access your payroll system/vendor using a Smartphone/mobile device.

Instead of having to be in the office, you could input your payroll data and make changes through

the device from any location, at any time. How interested would you be in having this type of remote

access to your payroll system?

Approximately one-half of participants across industries express an interest in

accessing their payroll system via Smartphone.

61%

52%

46%

40%

51%

64%

54%

53%

0% 10% 20% 30% 40% 50% 60% 70%

Retail Sales

Medical Practice

Law Firm

Accounting

Construction

Financial Services

Insurance

Multi-Industry

* Reflects the total percentage of the top-three boxes (extreme, moderate and slight interest).

*Accounting participants reported ―not at all interested‖ significantly (at least 90%) more often than all other industries.


Insurance: n= 72


Construction: n=115

Accounting: n=78

Law Firm: n=59


Retail Sales: n=119


WORK OUTSIDE THE OFFICE



20

In an average work week, how much time do you spend outside the office on business-related

matters?

On average, the multi-industry sample of small business owners spends

approximately nine hours outside of the office on business-related matters.

11%

15%

7%

11%

8%

11%

8%

10%

8%

9%

14%

13%

19%

11%

13%

12%

55%

59%

68%

55%

64%

76%

65%

58%

25%

17%

12%

22%

9%

4%

14%

19%

Insurance

Accounting

Financial

Construction

Law Firm

Medical

Retail

Multi-Industry

None Less than one hour 1 to 19 hours 20 hours or more


Insurance: n= 72


Construction: n=116

Accounting: n=78

Law Firm: n=59


Retail Sales: n=119



21

Would you say that the time you spend outside the office on business-related matters is…

Approximately one-fourth of participants indicate that their time spent outside of

the office on business-related matters is increasing.

29%

28%

30%

22%

15%

27%

24%

26%

51%

56%

60%

61%

78%

64%

57%

65%

19%

13%

10%

13%

3%

5%

16%

8%

3%

3%

3%

4%

3%

Insurance

Accounting

Financial

Construction

Law Firm

Medical

Retail

Multi-Industry

Increasing No Change Decreasing Don't Know


Insurance: n= 72


Construction: n=116

Accounting: n=78

Law Firm: n=59


Retail Sales: n=119


PARTICIPANT PROFILE


PARTICIPANT PROFILE

23

What is your current title?

24%

24%

18%

14%

2%

17%

20%

19%

39%

42%

35%

24%

14%

47%

38%

34%

10%

5%

15%

24%

15%

6%

11%

10%

1%

4%

2%

1%

7%

5%

6%

2%

3%

5%

3%

6%

3%

6%

17%

7%

12%

7%

4%

2%

4%

6%

9%

6%

2%

5%

3%

6%

11%

18%

11%

20%

49%

12%

11%

18%

Insurance

Accounting

Financial

Construction

Law Firm

Medical

Retail

Multi-Industry

President / CEO / COO Partner / Owner CFO EVP / SVPVP / Assistant VP / Principal GM Senior Partner / Partner Director / Department HeadManager / Senior Manager Other


Insurance: n=72


Construction: n=116

Accounting: n=78

Law Firm: n=59


Retail Sales: n=119


PARTICIPANT PROFILE

24

How many employees are there in your company, both full-time or part-time?

38%

58%

41%

23%

27%

13%

30%

49%

21%

26%

23%

35%

29%

40%

33%

8%

29%

9%

26%

30%

27%

32%

29%

17%

13%

8%

10%

12%

17%

15%

8%

6%

Insurance

Accounting

Financial

Construction

Law Firm

Medical

Retail

Multi-Industry

1 - 4 5 - 9 10 - 24 25 - 49


Insurance: n=72


Construction: n=116

Accounting: n=78

Law Firm: n=59


Retail Sales: n=119


PARTICIPANT PROFILE

25

In what region is your company headquarters located?

19%

21%

27%

19%

27%

26%

23%

26%

21%

21%

28%

16%

17%

27%

26%

24%

39%

33%

20%

37%

31%

23%

33%

26%

21%

26%

25%

28%

25%

24%

19%

23%

Insurance

Accounting

Financial

Construction

Law Firm

Medical

Retail

Multi-Industry

Northeast Midwest South West


Insurance: n=72


Construction: n=116

Accounting: n=78

Law Firm: n=59


Retail Sales: n=119

2010 Survey of Small Business Owners - ADP.com

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