IPA Small Business Research Board

IPA SBRB Study: Small Business Bullish for 2005 with Nearly 25% Expecting Significant Revenue Growth and 70% Expecting Overall Improvement for the Year

IPA Small Business Research Board Study finds small businesses plan to beef up hiring, invest in improvements to fuel growth

BUFFALO GROVE, IL (February 9, 2005) - Small businesses are preparing for a year of improvement in 2005, with 70% of the respondents participating in the latest IPA Small Business Research Board (IPA SBRB) poll indicating they expect revenues to be better than last year. Nearly 25% of the small businesses responding to the nationwide IPA SBRB poll said they expect their 2005 revenue to be significantly ahead of 2004.

Many of the businesses responding to the national poll say they plan to increase hiring and capital investment to support anticipated revenue growth.

More than four in five small businesses said they would meet or exceed revenues this year compared to last year. Breaking down their responses, 47% said revenues will increase slightly and 24% indicated revenues will increase significantly. Another 12% said revenues will remain the same. Significant growth indicates an increase of 10% or more over the previous year. This closely parallels an IPA SBRB study from July 2004 when 67% of respondents said they expected revenues to increase during the remainder of last year and about 20% said revenues would remain constant.

Small business owners plan to support this growth by hiring more staff in 2005. About 90% of those questioned said they would be maintaining or increasing the size of their staff this year. Of those, 42% said they would increase hiring in 2005. This represents a 16.5% increase compared to an August 2004 IPA SBRB study when 36% said they would increase hiring for the remainder of last year.

When asked if they would invest more for business improvements this year, 43% said they would, while 40% indicated they would invest the same as 2004. Only 15% said they would invest less.

Small business is optimistic about the general economy. Asked about the outlook for the economy for the rest of 2005, more than half (53%) said it would be better than last year and 35% indicated it would remain the same. Only 10% felt the economy would be worse than last year.

"Small business owners and managers have continuing optimism and appear willing to open their corporate wallets to tangibly support their beliefs," said Gregg Steinberg, President of IPA, the largest privately-held provider of management consulting services to small and medium-size businesses in North America. "Small businesses that have positioned themselves can take advantage of the opportunities ahead. Those who aren’t prepared risk being left behind."

The IPA Small Business Research Board ascertains the opinions of small business owners and managers on a wide variety of topics related to their own businesses as well as national and international issues that may impact their operations.

Participants in the poll provide feedback on significant issues and allow for real-time insight into the state of small businesses nationwide. The universe of participants is developed from among small businesses across the United States. More than 175 small businesses owners and senior managers participated in this IPA SBRB poll. The IPA SBRB study is a voluntary survey conducted via phone, email and fax. The poll was structured and supervised through an independent resource.

IPA is the largest privately held provider of management consulting services to small and medium-size businesses in North America. IPA and its more than 1,800 professionals offer a wide range of proven and innovative methodologies to help businesses grow and prosper regardless of the economic cycle. IPA either provides directly or through its affiliated companies a comprehensive array of business advisory services, tax and estate planning services or merger, acquisition and other financial advisory services in the United States and Canada. More information about IPA can be found at www.ipa-c.com.