Wherein I Attempt to Explain Conflicting Survey Results!
Survey says!
It’s a catch phrase that’s been in the American lexicon since Richard Dawson started hosting Family Feud in 1976. The show’s main hook is the embarrassing answers contestants give when they try to guess survey results.
It can be equally as embarrassing trying to explain survey results, even when the surveys come from solid sources. For example just today I tweeted that one survey found that small businesses added 35,000 jobs in May while another said small businesses weren’t going to hire in the coming months.
Sageworks makes it their business to know what privately-held companies are doing, and these are generally the smaller and medium sized businesses that propel the economy. They recently reported that both payables and receivables have been creeping up over the last year compared to the previous six years.
At the same time a Constant Contact survey found that small business revenue is on the rise. What gives with all these seemingly conflicting data?
Plus or minus how much?
The first thing we need to note is that it’s darn tough to know exactly what’s happening in small businesses. They aren’t required to make the kind of reports that publicly held companies are required to file. So it comes down to surveys and despite the confidence levels statisticians put on their work, they can be wrong.
However, there is an explanation for these contradictory results: small businesses do what’s necessary for success. For example, with the growing payables and receivables, some experts suggest that small businesses have merely found a way to work around banks’ current reluctance to loan money.
Small businesses are essentially loaning money to each other! This makes a lot of sense when you have long term relationships with suppliers and customers. You know that they are credit worthy and maintaining the relationships is beneficial for all parties.
Surveys vs real life
In a survey this shows up as growing payables and receivables; in real life it shows up as a growing willingness to work with one another when things get difficult. I think it’s an admirable trait. Of course, there are times when payments need to be collected, and I’ve given some advice on that in the past.
One way to take the error out of surveys, is to average the results of similar surveys conducted by different pollsters. And although I haven’t done this formally, I’ve been seeing a lot of surveys indicating profits are up in the small business sector. We know that employment hasn’t shown any dramatic increases, so it shows that small business are learning to do more with less.
Often when we come out of a recession, businesses of all sizes are quick to forget the lessons that the recession taught; they can become too anxious to hire and otherwise increase overhead.
While many may complain about this recovery, at least small businesses seem to be holding on to the lessons it taught us.
And that, as Martha Stewart would say, is a good thing.