Small and Medium Sized Enterprises (SMEs) dominate businesses in the United States, and contribute significantly to employment rates. Fortunately, according to the inaugural American Express Global SME Pulse, American SMEs are feeling optimistic about business prospects in 2017 and beyond.
This article examines current trends for SMEs in America, as well as attitudes toward future potential for growth and expansion. We also assess what challenges remain for American SMEs, and how businesses might look to overcome these hurdles.
According to U.S. Census Bureau Data from 2012, SMEs account for 99% of all firms in the U.S. and a significant 48.4% of total employment. SMEs therefore constitute a major factor in the U.S. economy.
Recent research has demonstrated positive attitudes among American SMEs which is promising. In a recent survey from 2012, senior executives and decision makers from SMEs across 15 countries were polled regarding their outlook on the global economy.
The research found that American SMEs were significantly more optimistic about the global economy than their foreign counterparts. In fact, a significant 54 percent were optimistic about the global economy over the following 12 months. A similar attitude was found regarding their attitudes toward local economic matters, with 6 out of 10 feeling positive overall.
This confidence has fortunately also translated into business confidence. The majority of the American SMEs polled here suggested that they were optimistic about their own ability to deliver increased revenues and profitability in the same period. In fact, approximately 69 percent of the SMEs surveyed expected growth of at least 4 percent in the next 12 months.
Additionally, a significant 42 percent of American SMEs anticipate growth of 8 percent over the next 12 months, which is double the percentage of growth anticipated worldwide. The same optimism was found to apply to profitability, with a significant 35 percent expecting a net profit of at least 8 percent per annum over the next three years.
Pathways for Success
While American SMEs are therefore optimistic about their future prospects, the research also suggests that SMEs are generally sticking with a handful of selected methods for increasing profitability and expansion. Almost half (48 percent) of those polled suggested that they are focusing primarily on more effective marketing and sales to domestic customers, followed closely by understanding changing customer demands.
One method that these SMEs may find particularly useful when it comes to understanding customer demand is to download inventory software. Downloading inventory software can help SMEs by allowing managers to track sales trends. This will make it easier for SMEs to differentiate between popular, fast-selling products and less popular, slow-moving items. Further, downloading inventory software can help SMEs to track and trace inventory stock and orders all the way through the supply chain to the customer, so that they can continually assess the efficacy of current processes and quickly implement changes where necessary. Having full oversight of this process will help SMEs to resolve customer queries quickly and effectively, helping them to stay in tune with their customer base.