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Visa Small Business Report Yields Mixed Picture |
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A new small business spending report released today by
Visa USA indicates that, while small businesses remain relatively bullish about
revenue growth, increasing expenditures on energy, healthcare and taxes are
pressing concerns for small business owners.
The report, titled “Visa Small Business Spend Insights,” will be
published quarterly and provides a comprehensive view of the U.S. small business climate by combining a poll
of U.S.
small businesses with the most current Visa spending data on small business
cards.
“More than most, small business owners are
susceptible to the effects of rising costs and fluctuations in the
economy. As such, they need to hedge
against spending increases and economic uncertainty by making smart IT
investment decisions and utilizing cash management tools such as payment
cards,” said Wayne Best, senior vice president, Business and Economic Analysis,
Visa USA.
Small Business Spending Outlook
The report identified the following four key spending
areas that are currently of top concern among small businesses:
Energy
- 75 percent of the small business owners surveyed
believe that energy spending will increase over the next six months.
* The average spend per transaction on Visa Business
cards for energy-related expenditures increased 18 percent for the 12 months
ending February 2007.
Healthcare
- 34 percent of respondents expressed concern that cost
of health care insurance will increase over the next six months, with this
concern being the highest among small businesses with two or more employees.
- The average spending on Visa Business cards on
healthcare-related expenditures increased 17 percent for the 12 months ending
February 2007.
Taxes
- *20 percent of respondents expressed concern about
rising taxes in the next six months.
- The average spending on Visa Business cards on tax
preparation services and tax payments increased by 80 percent for the 12 months
ending February 2007.
- Purchases for tax payments and tax preparation have an
average spend per transaction that is three times the size of the average
purchase for all Visa Business card transactions.
Attracting Customers
- 22 percent of small businesses surveyed expressed
concerns about attracting new customers over the next six months
- The average spending on Visa Business cards for
advertising, management consultants/public relations, publishing and related
expenses increased by 56 percent for the 12 months ending February 2007, twice
the growth rate of expenditures in all categories.
Small Business Profit & Loss Overview
The report results indicate that the future outlook for
both small business revenue and profits is positive based on the following key
findings:
- Nearly half (45 percent) of small business owners
surveyed expected an increase in revenues over the next six months, compared
with only 11 percent who expected a revenue decrease over the same period.
- 39 percent of small business owners surveyed expected
an increase in profits over the next six months, compared with 19 percent who
expected lower profits over the same period.
- In terms of cash flow, only 17 percent of those
surveyed expect that they will need to borrow more money in the next six
months, while just 18 percent expect to have issues collecting payment in the
same timeframe.
“Visa, as a leading provider of small business payment
products and processor of financial transactions, has a unique window into the
spending habits of U.S.
small businesses,” said Raghav Lal, senior vice president, small business, Visa
USA. “By comparing small business attitudes with
current Visa spending, we can provide insights into small business confidence
and outlook. This analysis enables Visa and our member financial institutions
to deliver small businesses with payment solutions tailored more closely to
their needs.”
For more information on Visa Small Business Solutions or
to view the complete Visa Small Business Insights newsletter, go to
www.usa.visa.com/business
About Small Business Spend Insights
Visa Small Business Spend Insights is a quarterly survey
to monitor the relative economic confidence of small businesses with $50,000 -
$25,000,000 in annual revenue. More than 600 small businesses are included in
the quarterly survey.
Visa USA
is a leading payment brand and the nation's largest payment system, enabling
banks to provide their consumers and business customers with a wide variety of
payment alternatives tailored to meet their evolving needs. Visa USA is
committed to increasing the choice, convenience, acceptance and security of
Visa payments for all stakeholders in the payment system - members, cardholders
and merchants. Through its 13,320 member financial institutions, more than 520 million Visa-branded cards have been issued to cardholders in the United States.
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