First ``State of the Union'' Study for Small/Midsize Business Released by AllBusiness.com; SMBs Approach Next Six Months With Optimism

Business Wire, Dec 6, 2005

SAN BRUNO, Calif. -- Small and mid-size businesses (SMBs) are facing the future with tremendous optimism and increased confidence in the power of online marketing, according to a new survey released today by AllBusiness.com, a leading online resource offering advice and solutions that help businesses grow and succeed.

The "SMB State of the Union" study was conducted by market research firm Frank N. Magid Associates on behalf of AllBusiness.com and included responses from over 1,000 small and midsize business leaders across the country. According to the Small Business Association, small businesses represent 99.7% of all employers, currently employ half of the private workforce (50.1%) and provide approximately 75% of the new jobs added to the economy.

Optimism Abounds

An overwhelming majority of SMB leaders (79%) expect business to be better in the next six months than the same period last year. More than half (54%) of participants plan to add staff and eighty percent plan to invest in technology for their business.

"Despite recently rising oil costs and the uncertain direction of housing and consumer confidence, the SMB outlook is tremendously positive," says Peter Horan, CEO of AllBusiness.com. "More and more SMBs are hiring, expanding space and investing in technology."

"Considering today's fluctuating business climate, we were pleased to find such optimism from SMB leaders," said Jodi Gusek, Magid VP of research and study author. "Survey participants identified far more opportunities than obstacles to business growth in the coming months."

Internet is Springboard for Growth

The survey also shows that SMBs point to the Internet as a primary driver of growth and eighty-three percent strongly agree that the Internet helps them run their companies. The World Wide Web has not only enhanced the channels of communication, but also opened up new markets for business.

New Net Frontier...Online Marketing

Already close to one quarter (22%) of SMBs make use of the Web as a marketing tool using email marketing (62%); search engine optimization (56%); banner advertising (36%); and pay-per-click advertising (25%). Among these SMB net marketers, 74% plan to increase their investments in online marketing over the next six months and their peers seem to recognize the benefits they are receiving as an additional 43% percent of SMBs intend to begin online marketing within the next six months.

"The small business marketplace is gaining ground in online sophistication," adds Horan. "SMBs are increasingly coming to the realization that there is an inextricable link between online marketing efforts and future success. SMB leaders planning decreases in online activity are virtually non-existent."

AllBusiness.com also announced the launch of its SMB Barometer - an index-based metric that forecasts the expected growth of SMBs for the next six months. The numerical figure provided by the barometer will reflect the combined values of five components, including SMB staffing plans, business real estate trends, business branch plans, technology investment and overall business outlook. The first SMB barometer will be available in early 2006.

About The "SMB State of the Union" Study

Frank N. Magid Associates prepared the "SMB State of the Union Study" for AllBusiness.com surveying a national sample of 1,060 for-profit small and midsize business leaders from September 12 through October 11, 2005. The survey included 457 participants who were externally selected and 603 who were from an AllBusiness.com registered user list. Participants were 18 years or older and were either owner, partner, president, CEO, COO or vice president at companies with no more than 499 employees. For more information about the study, please visit www.allbusiness.com/press and download the survey summary.

About AllBusiness.com.

AllBusiness.com is a leading online resource offering advice and solutions that help businesses grow and succeed. Founded in 1999, the Company operates one of the Web's premier business sites, providing practical information and services for business professionals and growing businesses. The site includes how-to articles, business forms, contracts and agreements, expert advice, blogs, business news, directory listings, product comparisons, business guides and more. In addition to its flagship Web site, the Company's content can be accessed by its content syndication program, RSS feeds and email newsletters. AllBusiness.com is based in San Bruno, CA and backed by VantagePoint Venture Partners.

About Frank N. Magid Associates

Founded in 1957, Frank N. Magid Associates provides research-driven, strategic media counsel on the evolving consumer mindset for clients in 37 countries. The company helps businesses make sense of a constantly evolving media marketplace. Magid provides businesses not only with an understanding of the attitudes, opinions and actions of today's technology-saturated consumers - but offers research-driven strategic advice on how to successfully brand, advertise, market and design their products and services. For more information, please visit Magid on the Web at www.magid.com.