A new survey of 1,000 small business owners across the United States by management consulting firm George S. May International found that 45% of respondents said their businesses are not profitable, and 60% cited the economy as the number one reason they are not profitable or as profitable as they could be.
“Many business owners feel that the recession is to blame for all of their woes, but that’s simply not the case and is actually part of a bigger problem,” said Paul Rauseo, managing director of the George S. May International Company. “There are plenty of small businesses making money in this economy because they are taking care of the business side of the business – controlling costs and increasing productivity.”
Aside from the economy, 29% of respondents cited competition within their industry as the top reason they are not profitable; while 10% cited company inefficiencies in sales, finance, operations or labor; and one% cited management.
“This survey speaks volumes to what we see with our troubled clients everyday,” Rauseo said. “These numbers should be flipped for a business to be successful. The economy and competition are convenient excuses and should not be the main reasons for a company’s success or failure; the management of the business and overall company efficiencies are the more powerful determining factors on whether or not your business will succeed or fail.”
The survey also showed that 45% noted their accountant as the primary professional advisor they consulted for business help, while 20% noted “other” without specifying, 18% cited their attorney and 17% noted a management consultant.
Rauseo said it is alarming that 60% said they are satisfied with their accountant’s help in making their business profitable, even though a majority of them are not profitable. In fact, 65% said their business is worse off this year than in 2008.
“Now is the time to climb out of the cellar of economic despair and identify wasted assets, wasted profits, wasted business, wasted services, wasted actions, wasted technology, wasted talent and wasted effort and fire your board of directors Mr. Complacency and Mr. Procrastination.”
“We hear many business owners say they just don’t have enough sales or there is a lack of advertising,” Rauseo said. “But really, they don’t have the business intelligence to tell them where their wastes are.”