If you think the economic outlook for Connecticut’s businesses looks bleak, you need to look beyond the obvious.
The recently released 2009 survey of Connecticut businesses, conducted by BlumShapiro and the Connecticut Business & Industry Association (CBIA), shows signs of promise for business owners in our fair state. It surveyed 707* business owners on the current economic, financial and regulatory environment in Connecticut.
Despite the fact that roughly half of all responding businesses across the state either expect no growth or negative growth for their companies this year, I believe there are still reasons to be optimistic. Here’s why:
• Forty-one percent of surveyed business owners said that current conditions have encouraged their company to focus on core functions, their most valuable customers, and ways to increase market share for their products and services. Definitely a good thing for all businesses, particularly when on the brink of emerging from a recession.
• Fifty-three percent have developed new products and services in the last year, and 58 percent plan to do so in the next 12 months. New products and services typically mean more revenue and greater profits for companies and, in turn, more hiring. A big reason to stay positive.
• Forty-two percent of business owners expect their companies to turn a profit this year and nearly 30 percent expect to break even.
• When asked where they would most likely expand operations, 58 percent of business owners said they would expand within the state of Connecticut. The reasons? Proximity to markets and suppliers and a skilled workforce and labor pool. And, in a related question, nearly one-third of business owners said they’re having trouble filling jobs, particularly entry-level jobs and manufacturing positions. Definitely welcome news for anyone looking for work in these two areas.
Of course, Connecticut’s businesses need to cultivate these “green shoots” and create sustainable growth over the foreseeable future. Question is … how?
A few things come to mind:
1) Be an advocate. Stay abreast of proposed tax changes. Voice concerns to legislators about any new policies that could stymie growth … and overall economic recovery.
2) Make tax planning a priority. Although state and federal taxes may be on the rise, there are a number of credits and strategies that may benefit your business or industry. Seek a ways on how to minimize your exposure to taxes.
3) Make strategic use of technology. Since more than one-third of respondents plan to use the Internet to achieve growth in the next 12 months, it’s a good idea to consider how innovative tools and tactics, including the Internet, direct marketing and strategic alliances, can benefit both internal and external efficiency and productivity.
In fact, the survey states, “Aligning information technology (IT) with other business strategies can help companies not only streamline processes and achieve savings, but also innovate and create value.”
4) Create a risk management plan. Although business in general is increasingly dependent on technology, 60 percent of those surveyed indicated that they don’t have an information risk management strategy, which is a plan for limiting business disruptions caused by technology issues. Even more noteworthy, 43 percent of business owners said they did not have a continuity plan for responding to such disasters, nor did they expect to develop one in the near future. With so much that can go wrong in this “information age,” it’s incredibly important to have a viable plan … just in case.
5) Partner with experts. They can help deal with ever-changing issues and policies affecting Connecticut’s business community — and develop solutions that can solve problems, meet needs and respond to viable opportunities.
Now’s the time to focus on the future and keep a positive outlook.
Jay M. Sattler, CPA, MST is a partner at BlumShapiro.
*Conducted via email in June 2009. Surveys were sent to 5,500 Connecticut businesses; 707 were completed for a 13 percent response rate. Margin of error was +/-13 percent.
