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Small businesses showing signs of recovery

Staff writer |
Following several years of lackluster growth, small businesses are now showing signs of recovery, according to findings from the Bank of the West Small Business Growth Survey.

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Technology investment has been identified as one of the key differentiators to achieve that growth.

The majority of those polled expressed optimism about their businesses as they maintain or improve their revenue, profitability and sales.

With this survey, Bank of the West introduces the Bank of the West Small Business Growth Index, a new way to benchmark year-over-year growth sentiment of small businesses.

The index will track five key indicators (profitability, revenue, sales, investments, and cutbacks) through a series of questions to produce the final index number.

On the scale of 0-100, less than 50 signals decline and greater than 50 indicates growth. This year's number, 54, illustrates the upturn in financials and reflects small businesses' focus on investing back into their businesses.

Of those polled in the survey, 72 percent said they plan to invest in the coming year, illustrating the importance of reinvesting profits back into their businesses. Nonetheless, many are still cautious about the economy.

Those small businesses that are experiencing growth are nearly twice as likely as contracting businesses to say that investing in technology is extremely or very important to their business's success in the next year (51% vs. 26%).

More than half of growing businesses (52%) indicate that they have increased their technology budget over the past 12 months, compared to only 15 percent of declining businesses.

Growing businesses are more likely than declining businesses to invest in technology to deliver a better customer experience (50 percent versus 37 percent).

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