The Citibank Survey completed in April 2011 illustrates there is a sign that
small businesses are finally emerging from the recession and looking to grow,
an increasing number of California business owners are adopting social media
as a way to better market their business and reach more customers, according
to the latest Citibank small business survey. The increased use of social media
represents one of several findings in Citibank’s survey that shows small
businesses in California are taking concrete action to grow in 2011.

According to the survey, use of social media increased significantly over the
last year, with 34 percent of California small business owners saying they use
social networking sites such as Facebook, Twitter or LinkedIn to market their
business, compared to 24 percent a year ago.

When asked what steps they will take to attract more business in 2011, 67 percent
of California small business owners say they will increase marketing and 56 percent
say they will offer new products and services. Additionally, nearly half of California
small businesses plan to expand this year to reach a larger geographic area.

Hiring among California small businesses remains tepid. The majority of California
business owners (77 percent) say they will keep the same number of employees over
the next 12 months, while 17 percent plan to increase their workforce and 7 percent
plan to reduce jobs.  When asked about wages, the majority of respondents (57 percent)
say the compensation they pay their employees has remained the same in the past year,
compared to 25 percent who have increased wages and 18 percent who cut pay. Forty-nine
percent say they provide healthcare to their workforce, compared to 51 percent who say
they do not.

Of course, small businesses in California face many unknowns and challenges. Eighty
percent of respondents say they are concerned about another economic downturn, while
73 percent say they are prepared should one occur.

When asked what would have the most negative impact on their business this year, small
business owners say the increased cost of gas and energy (27 percent), the rising costs
of raw materials (19 percent), and inflation (18 percent). Respondents cite reducing
taxes (28 percent) and making credit more available (28 percent) as the most important
issues to address if advising policy makers.

Though a majority (70 percent) continues to rate current business conditions as fair or
poor, Citibank’s survey shows that California small business owners clearly believe the
worst is over, with 58 percent describing 2011 conditions as “steady as a rock.” Seventy-
three percent say their business is better or about the same as a year ago, compared to
27 percent who say it is worse. Looking at the rest of 2011, 90 percent expect the year
to be better or about the same as 2010, with 10 percent expecting it will be worse.