Citibank Survey Finds California Small Business Owners Prepared For Longer-Term Economic Challenges and Poised for Growth in 2012

According to the latest Citibank small business survey released today, the majority of California small business owners believe they are poised to grow or are already in growth mode. Forty two percent say they are “holding their own, but poised to grow when the climate is right” and 33 percent indicated they are already growing. Despite feeling as though they are primed to grow should the opportunity present itself, the vast majority (88 percent) of small business owners remain concerned about the economy, including the possibility of a double-dip recession. The results also show an increasing trend in small businesses feeling more prepared to withstand longer-term challenges.

“We are excited about the results of this survey, which show that California small businesses are optimistic about the future and taking action today to grow as the economy improves,” said Rebecca Macieira-Kaufmann, President of Citibank California. “Small businesses are the engine of California’s economy, and their improving outlook is a great sign for the state.”

Economic Key Findings:

• 91 percent said they feel they are either very (61 percent) or somewhat (30 percent) responsible for the nation’s economic recovery
• 88 percent are concerned about the possibility of a double-dip recession
• 77 percent are prepared if the economy were to experience another downturn
• 71 percent plan to keep the same number of employees next year, 24 percent are projecting employment increases and 5 percent plan to reduce the number of employees
• 32 percent plan to hire temporary or part-time workers instead of full-time employees

As California small business owners look back over the past few years, they share that the biggest challenges of owning/running their business have been:

• Taxes, insurance and/or benefit costs (67 percent)
• Declines in sales/poor economic conditions (67 percent)
• Personal stress/being accountable for everything/everyone (63 percent).

The American Dream

Despite the challenging environment, the majority of California small business owners (58 percent) say they are living the American Dream.

• 83 percent said owning a small business helps them fulfill the American Dream
• For small business owners, living the American Dream also means being able to afford the lifestyle they want (76 percent) and being able to save and plan for the future (79 percent)
• 78 percent cited “being their own boss” as the key benefit to being a small business owner

Looking Ahead: The Rest of 2011 and 2012 Outlook

As small business owners in California look to the future months and 2012, 45 percent say it will be “steady as she goes – continuing much as we are now” for the holiday season.

In an effort to improve or grow their business in 2012, small business owners plan to:

• Increase their marketing efforts (69 percent)
• Get better pricing from suppliers, vendors or landlords (62 percent)
• Introduce new products and services (56 percent)
• Work longer hours (47 percent)

Looking forward to 2012, topping the list of most important issues for their business:

• Consumer confidence (66 percent)
• Maintaining or increasing sales (70 percent)
• Taxes and/or government regulation (61 percent)

As small business owners plan for 2012, they are likely to increase:

• Use of their website to drive business (66 percent)
• Marketing using social networking sites (47 percent)
• Use of email marketing (46 percent)

“The results of this current Citibank Small Business Survey are consistent with what we’re seeing and hearing from our clients, in that they are being thoughtful and prudent in their planning,” said Raj Seshadri, Head of Small Business Banking at Citibank. “The underlying message here appears to be that small business owners are preparing themselves for a more sustainable growth path, and are not expecting any type of quick fix or change.”

About the Survey

This Citibank poll was conducted via telephone by Abt SRBI from August 4 – August 16, 2011, among a national random sample of 1,000 small business owners/operators in the United States, with revenue over $100,000 and no more than 100 employees. The margin of error is approximately +/- 3.0% percentage points at 95% confidence. Surveys are subject to other error sources as well, including sampling coverage error, recording error, and respondent error.

About Citibank

Citi®, the leading global financial services company, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management. Additional information may be found at www.citigroup.com.

© 2011 Citigroup Inc. Citibank, N.A., Member FDIC. Citi and Citibank and Arc Design are registered service marks of Citigroup Inc.