Innovation Key to Success and ...

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Innovation Key to Success and Survival for Small Business Owners

New Wells Fargo/Gallup Survey: Ability to Innovate Quickly is Strongest Competitive Advantage for Small Businesses

SB Informer
Friday, April 28, 2006; 08:11 AM

SAN FRANCISCO - While the small business competitive landscape becomes increasingly crowded, small business owners continue adapting to economic fluctuations and market demands by focusing on innovation. According to a recent Wells Fargo/Gallup survey, innovation is a critical focus of business owners looking to remain competitive.

Seventy-five percent of small business owners surveyed have adopted new procedures to improve quality assurance, demonstrating a strong customer focus as a top business line objective. Innovation around technology spending has also been important, as seventy-one percent of business owners surveyed cited increased spending on new technologies like computerized bookkeeping and updated computer systems. Additional areas of focus include different ways of marketing and selling products (seventy-one percent), and new product or service innovation (sixty percent).

"Small businesses are built on the concept of innovation, and their ultimate success depends on their ability to grow and adapt to unexpected market changes," said Rebecca Macieira-Kaufmann, executive vice president and head of the small business segment for Wells Fargo. "Innovation happens in many different ways: through ideas, product development, process enhancements, or revised marketing strategies. There is no blueprint on how to innovate, but time and time again, small business owners demonstrate resiliency and an uncanny ability to respond to the changing needs of their customers."

More than half of small business owners surveyed -- fifty-seven percent -- currently allocate time for idea generation and creative exploration. Fifty-nine percent also are taking courses or training to improve their skills and continue to learn, while fifty-five percent are providing additional skills training for their employees.

Since the third quarter of 2003, the Wells Fargo/Gallup Small Business Index has surveyed small business owners on a quarterly basis on their perception of current conditions and future expectations relating to financial situation, revenues, cash flow, capital spending, number of jobs and credit availability. Results are based on telephone interviews with 603 small business owners conducted March 1, 2006 to March 15, 2006. The margin of sampling error is +/- 4 percentage points.

The overall Index remained stable at 109 (up two points from the previous quarter), demonstrating small business owners' continued optimism. Since its inception, the Index scores have ranged from a low of 93 in December 2003 to a high of 110 in March 2005. An Index score of zero reflects an equal number of small business owners who are optimistic and pessimistic about their company's situation.

About Wells Fargo

Wells Fargo & Company is a diversified financial services company with $492 billion in assets, providing banking, insurance, investments, mortgage and consumer finance to more than 23 million customers from more than 6,200 stores and the internet (wellsfargo.com) across North America and elsewhere internationally. Wells Fargo Bank, N.A. is the only bank in the United States to receive the highest possible credit rating, "Aaa," from Moody's Investors Service.

Providing financial products and services to more than one million businesses with annual sales up to $20 million in all 50 states, Puerto Rico and Canada, Wells Fargo is the #1 lender to small businesses in the United States in total dollar volume according to the most recent CRA data (2004).

The second largest national SBA lender in dollars, Wells Fargo is an SBA Preferred Lender in 30 states and the District of Columbia, and originated 4,165 loans for $579 million in 2005. Its diverse business services programs provide outreach and education to women, African American, Latino, and Asian business owners about financial services. Since 1995, Wells Fargo has loaned more than $28 billion to women and minority business owners.

About the Gallup Organization

For more than 60 years, the Gallup Organization has been a recognized leader in the measurement and analysis of people's attitudes, opinions and behavior. While best known for the Gallup Poll, founded in 1935, Gallup's current activities consist largely of providing marketing and management research, advisory services and education to the world's largest corporations and institutions.

Website: http://www.wellsfargo.com/