Small and Medium Businesses Now

Cloud computing is most familiar among both business and personal users.

According to survey conducted by Spiceworks, during the first half of 2010, 14 percent of small and medium businesses (SMBs) were found to be using cloud computing services and another 10 percent are planning to deploy cloud-based services.

About 38 percent of SMBs having less than 20 employees use or expected to use cloud computing solutions in the next 6 months. Just 17 percent of organizations with 20 to 99 employees the same plans, while 22 percent of organizations having more than 100 employees are planning.

These findings are based on a global survey of 1,500 IT professionals at SMBs having fewer than 1,000 employees.

41 percent of SMBs in Latin America/South America (LASA) and 35 percent of SMBs in the Asia/Pacific region are adopting cloud services. It is 24 percent of SMBs in North America and 19 percent in Europe.

Technology companies are found to use cloud services a bit faster. 34 percent of SMBs in the tech sector use or are planning to use cloud services. 22% of services sector (such as finance, HR, consulting) companies are using or planning to deploy the cloud. The adoption rates in other industries is 20%.

NFIB Index of Small Business Optimism, in May, increased to 92.2(gaining 1.6 points). Out of 10 Index components, 7 increased, with job creation and plans for capital expenditure remained at the same levels.

Trends in some of the major components are as follows:

Inventories and sales
The net percent of all owners (seasonally adjusted) having higher nominal sales improved four points to a net negative 11 percent in the past 3 months, and up by 14 points in the past two months. It is found to be best since April 2008.

Credit Markets
32 percent(1 point above survey record low) of them who are accessing capital markets at least once a quarter, continued to report difficulties in obtaining credit. Overall, 92 percent of the owners reported that all their credit needs were met, or they did not want to borrow.

Only 3% percent of the owners cited “finance” as their top business problem, while 30 percent cite weak sales.

Profits and Wages
Of the companies reporting low turnover or losses, 53 percent said weaker sales, 4% cited rising labor costs, 6 percent increase in materials costs, 4% percent increased insurance costs, and 6% cited lower selling prices and another 6 percent cited taxes and regulatory costs. Regarding wages, 10% said they have reduced compensation and 13% reported gains.

Labor markets:
Over the next three months,7% plan to reduce employment and 14 percent plan for new jobs . These two remain unchanged from the last results.

Spending on Capital:
The frequency of capital outlays were unchanged at 46 percent of all firms, over the last 6 months. 20% (4 points above 35 year record low) of owners are planning to make capital expenditures over the next few months. 5% (up by 1 point) say the current period is a good time to expand facilities. However, small business owners were far less optimistic than previous years about the economic recovery.

Discover Small Business Watch, reported that the expansion plans of small businesses showed some improvement in January, but again declined in February, showing no signs of improvement there on.

Discover’s monthly check, measured pulse of small business owners and found that it was 75.7 in March, which is down by 9.2 points from February and same as last year figures.

When asked about their businesses economic conditions, in March 53 percent (37% in february) of them say the situations may turn still worse in the next six months. Of the remaining, 20 percent expected things to get better, 20 percent expected them to remain same, and 6 percent are unsure.

When asked about their investment plans, 52 percent (43% in February) like to decrease spending, while 27 percent said that there are no changes in their investment plans and 18 percent said they are planning to increase spending.

On being asked about the direction in which economic conditions globally will move, 58 percent (up from 44% in February) said economy will get worse, while 22 percent (down from 31% in February) think it is improving, and 16 percent (24% last month) said it’s the same. When asked about the current economy, 59 percent say it poor, 31 percent viewed it fair, 6 percent said good, and 1 percent accepted it to be excellent.

Association of Chartered Certified Accountants (ACCA) conducted a survey on various financing options, that are being availed by SMBs in UK. The survey was conducted on 380 UK Small and medium firms and about 100 accountancy practices. The list of financing options and their success rate are as follows:

33% of the respondents opted for Bank Overdrafts with a success rate of 73%, making it the most popular form of financing.

29% of SMEs were seeking additional credit from suppliers (excluding late payment) with agreed terms in the past year, with 91% success rate. Late payment was opted by 17% of respondents in the past year, having 89% success rate.

21% of the respondents were found to be using other funding options like turning to owners, families, directors and friends. It was found to have 94% success rate.

It was also reported that the accesibility to the above finacing options were high for larger firms than small businesses. The micro enterprises (less than 10 employees) were found to be worst hit in accessing to finance from banks as their applications were not approved due to lack of security or collaterals.

Further 45% of SMEs were finding difficulty in getting credit from suppliers than banks and commercial lenders, as they were withdrawing credit from customers. 54% of them have tightened their credit policies and 13% of SMEs were hoping to withdraw credit from customers if it was commercially viable.

Despite the credit crunch, SMEs are failing to realize the importance of updating the credit related information for their businesses. They were further found to be relying on incomplete and very old information. 57% of micro firms were of opinion that credit reference information is not that important in taking credit decisions. 11% of respondents found tax deferral to be the most successful type of support provided to SMEs from Government.

According to CBI Trends Survey, conducted on 382 companies, the domestic demand is supposed to be increased in next three months, indicating the SME owners to speed up their production processes. The temporary boost in demand due to stock rebuilding also faded which led to slight decrease in output growth in last three months till October.

Due to the increase in demand domestically and overseas, the output is expected to be increased. With a balance of +19% (the balance is +9% in last three months), 31% of the respondents expect output to rise in the next quarter, while 12% expect a fall. On being asked about the volumes of total orders for the next three months, 31% of SMEs expect it to rise, while 18% expect them to fall, creating a balance of +14% (up by +9% in the past quarter)
For the next three months, there is found a rise in domestic orders(a balance of +10%), it remain stabilized during the three months till October (+2%). coming quarter is expected to see a solid growth with balance of 13% (11% last quarter).

The statistics in regard with head count, showed an increase. Creating a balance of +7%, the number of employed persons increased at a much faster rate all across the sector. It was +7% in April 2008 while it is expected to be -3% in next three months.

The reports showed that firms are planning to increase their investment in plant and machinery, with a balance of +6%, in products and process innovation (+10%) and willing to decrease in buildings with a balance of -15%.

Stability was seen in the work in progress inventories ( a balance of 0%) and inventories of finished goods(-1%), with a slower increase in stocks of raw materials (+6%), after rebuilding of stocks in the past quarter.

As the cost of average units increased rapidly, there was decrease in profits. This quarter the rise was with a balance of +31% and it was at the fastest rate since 2008 October (53%). but it was also found that few firms were passing these on to the customers, as the average domestic prices were found to be flat at -1% balance for the third quarter consecutively.

12% (slightly raised from previous quarter) external finance was cited as a limiting factor to capital expenditure in the coming year. 7% of firms find the finance will limit output.

According to a report by EU on SMEs in Europe, SMEs were found to be largely contributing to Europesn economy in terms of employment. It was found that SMEs provide employment for 88 million of population, while large enterprises employ only 43 million. SMEs constitute for about 67% of the employment in private, non-financial economy. Apart from this, ‘old’ Member States constitute to about 81% of total employment in private, non primary sector, implying 19% in the ‘new’ Member States. Of the total employment in old and new Member States, two thirds were found in SMEs. Because of the differences in GDP per capita, the old and new Member States differ in terms of labour costs per employee. The total labor costs per employee in EU-15 was € 44,000 per year, whereas it is € 9,000 in new Member States. In case of SMEs the labour costs per employees is 4 times higher in old Member States than in new Member States.

The size-class distribution of employment and the average scale at which enterprises in the non-financial business economy operate, differs between the European countries, US and Japanese countries. It was found that SMEs in Iceland, Switzerland and Norway contribute to about 70% of employment, with EU average being at 67%. But in USA the major share of employment is taken by large enterprises, when compared to EU. Japan is found to share the same employment as of EU, with average enterprise size being higher at more than 8 people.

There is difference in employment growth pattern among old (EU-15) and new (EU-12) Member States. In EU-15 contries there was an average positive employment gowth between 2002-2007, with micro and small businesses showing fastest growth, medium and large sized businesses showing moderate growth. But the scene was reverse in the EU 12 countries as the large and medium sized enterprises showed fastest growth and micro and small enterprises showing less growth. This adverse size-class pattern may be due to low profits of micro enterprises. Coming to large enterprises, they showed negative job growth as in EU-15 countries.

The EU submitted a report on European small businesses. As per the report, SMEs in Europe contribute significantly to the European Economy in terms of employment. SMEs contribute to about 67% of employment in private, non financial economy. SMEs employ 88 million people, while large enterprises employ 43 million people. Among the differrent size classes in SMEs, micro firms are the largest source of employment, employing 39 million people, constituting to 30% of total private non financial economy employment. Micro firms employ 2 persons on an average, therefore 92% of all employees contributing to 30% of the total private employment.

Between 2002 and 2007, there was an increase by 8.7 million jobs in the non financial sector of EU. SMEs showed a growth of 7.3 million in employment, while LSEs showed increase by 1.4 million. Thus, SMEs’ contribute to 84% of growth in total employment growth of 67%.

According to Eurostat, the birth and death of an enterprise also contributes positively to employment growth. Newly born enterprises (almost being micro enterprises) in the EU, accounted for on average 3.3% of total employment in 2005. This outweighed the loss of employment due to death of some enterprises.

Online business is changing the traditional business processes. In India, online business is increasing quickly; it will be accelerated faster in the future too. Businesses in India are increasingly using the social networks to promote their businesses or products.

As per the Octane Research gearing up e-marketing in India 2012. As per the research, around 69% of the marketers gave a response on online promotions; 53.1% of marketers planned to use e-mail marketing and 46% of people wanted to use their own websites.

Research on digital network usage for marketing professions for 2011 shows that social media usage percentage was 61%, search marketing 42%, e-mail marketing 40%, website development 34%, video 16% and web cast 11%.

In India Internet penetration is low. But web marketing companies are slowly and steadily increasing their interests on online business. Most of the small and medium size companies in India updating their business with online marketing.

If your business is employee supported, then automatically you are in need of a payroll software. Employees provide their physical or intellectual support to an organization, only in return of a good compensation. Therefore, it is the responsibility of the company to provide the adequate compensation suitable to the roles of the employees. The measuring of the compensation is a typical process. Hence, for making it easy you can use a pay-roll software.

The payroll-software provides many benefits to an organization. Some of them are given below:

Wage processing: The payroll software eliminates the manual errors in payroll processing. It measure the payrolls based on the information that is recorded automatically like attendance, check in and check out time, hourly productivity, etc. The payroll software provides the monthly and yearly salaries, completing the whole payroll cycle.

Time recording: The payroll software is important for time keeping. It maintains the spreadsheets for regular maintenance and adjustments of the employes working hours. According to these working hours it measures the compensation of the employee.

Reporting: Payroll software provides wealthy reports along with the working hours data. This reports allow the brief analysis of the employes costs.

Storing personal records: This software stores the individual data of the employee for measuring the yearly leaves and additional working hours. It is important in employee appraisal process.

Speed and efficiency: Payroll software makes the compensation management process faster and effective. It reduces the human errors. It gives correct calculation and it generates the printed cheques quickly.

Planning: Payroll software provides the forecast means, which gives the perfect plan for managing in staff costs and budget plans.

Payroll-Software is very much beneficial for an organization, it controls the errors in payroll process. It provides the correct compensation to the employees and it records the data which is beneficial to management for making decision.

According to the PayNet, the small businesses in U.S have increased their rate of borrowing in September, indicating that the economy is expecting the recovery soon. This up trend in borrowing is seen as a welcoming change as this was seen even before the introduction of monetary stimulus by Federal Reserve bank. This situation of increased lending is supposed to have a positive effect on the whole U.S economy due to the fact that small businesses constitute for 80% of total hiring in U.S.

The Small Business Lending Index given by Thomson Reuters and payNet had measured the volume of financing all across the U.S and found that the index rose 16% in September (15% in August) from the previous year.

The current U.S economy is facing problems of low inflation and unemployment.Fed Policy makers are finding it hard due to low inflation level which is around 1% (2% is fond to be a healthy inflation rate). One in ten persons of the total U.S. employable population is out of a job.

While the borrowing saw a surge, the data reveals the statistics of delinquency also. Accounts in moderate delinquency (behind by 30 days or more), fell to 2.65 percent in September (lowest since mid-2007) from 2.81 percent in August. Accounts in severe delinquency (90 days or more), fell to 0.76 percent in September from 0.85 percent in August. Accounts that are in default or unlikely to get paid ever (behind 180 days or more), fell in September to 0.81 percent of total receivables from 0.84 percent in August. On the whole, it was found that there were only few companies which were falling behind on payment of existing loans.