Mike Meldman - Explore Big Sky

uSineSS
CEos Say they’re hiring,
recovery is accelerating
by alex tenenbauM
For the first time in three years, the
majority of small-business CEOs
nationwide said they plan to hire
in the next twelve months, according
to a recent Vistage CEO Confidence
Index study. Of the 1,729
respondents in the quarterly study,
77 percent expect increased revenues
and 63 percent foresee higher
profits in their own companies.
A whopping 54 percent expect to
expand their staffs in 2011, while
only one in 20 said they’d have to
trim back.
“On the whole, companies are coming
out of their bomb shelters,” said
Becky Smith, Ed.D., the Vistage
Chair in Bozeman. “They are no
longer in survival mode. Increasing
revenue means there’s more money
to invest in growth, more money to
invest in people, and more money
to enter into new markets.”
The quarterly Vistage CEO Confidence
Index is the nation’s largest and
most comprehensive report on the
opinions and projections of CEOs
at small- to mid-sized businesses
(grossing at least $5 million annually).
Since its inception in 2003, the
index has fairly accurately predicted
changes in GDP and employment
two to three quarters hence.
The overall confidence of CEOs
spiked in the fourth quarter. After
reporting an overall confidence rating
of 93.7 for the first quarter of
2010, 94.4 for the second and 95.1
for the third, the index exploded to
106.3 for the fourth quarter.
The surge in confidence is tempered
by hardship. Nearly half of
the CEOs surveyed said they used
personal assets in the last three
years to keep their companies afloat
and their people employed.
“CEOs are pouring a lot of blood,
sweat and tears into their companies
right now. They will be the heroes of
our economic recovery,” Smith said.
Christian James of Xcentric, a cloud
data hosting company for accounting
firms, with offices in Bozmeman and
Atlanta, participated in the Vistage
survey. A Vistage member CEO for
six years, he said he expects his company
of 40 current employees will
add four new positions in Atlanta,
and another four to six in Bozeman
in 2011. All of these positions will
be in computer technology.
“We have a desire to invest and to
grow, and the way the economy
looks, we’re pretty confident in doing
so,” he said.
At the depths of the recession
in late 2008, 97 percent of the
CEOs said their companies were
in decline. In this latest study, just
seven percent reported continuing
declines. For the broader economy,
58 percent of CEOs expected improvement
during the year ahead,
while just five percent expected any
further declines. That’s the most
favorable outlook for economic
growth since the start of 2004.
Revenue growth was expected by
77 percent of all firms in the 4th
quarter survey, up from 59 percent
one year ago and 36 percent two
years ago. Just fiver percent anticipated
declines in revenues, the
lowest proportion in five years.
Given that 60 percent of firms
expected no increase in the prices
they charged, most of the revenue
gains were expected to come from
increased sales. The relative inability
to pass along cost increases to
their customers meant that managing
costs was a top priority for
one-in-five firms. Another one-infour
firms placed greater emphasis
on maintaining or expanding their
customer base.
Two thirds of all firms expected
increased profits during 2011,
double the number of CEOs who
expected rising profits at the low
point two years ago.
Among all firms, 46 percent
planned to increase their investment
spending, up from 34 percent
one year ago. While there remains
some uncertainty about whether
the strength in their future sales
would be long lasting, the investments
now planned by CEOs have
increasingly reflected the likelihood
that growth in their firm’s
sales would justify those investments
over the foreseeable horizon.
This is certainly a bevy of good
news for national and state economies,
especially since the index
has proven to be a reliable indicator
of economic shifts, predicting
the Great Recession six months
before the markets slid. However,
the companies represented in the
index are not a random sample.
Rather, they all have one thing in
common. At their helms are Vistage
member CEOs, who participate
in chair-led advisory board peer
groups, receive one-to-one coaching,
learn from expert speakers, and
interact among a global network of
CEOs from a broad range of industries.
A 2010 analysis showed that
Vistage member companies in the
U.S. substantially outperformed the
average comparable Dun & Bradstreet
companies in growth over the
last five years.
Tax return preparation
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WAYNE NEIL, JR. CPA
DOUG NEIL CPA
JAKE NEIL CPA
big Sky Weekly
“on the whole, companies are coming out
of their bomb shelters...they are no longer
in survival mode.” - becky Smith, ed.d.,
vistage chair in bozeman.
The Q4 2010 Vistage CEO Confidence
Index includes responses from
1,729 US CEOs, surveyed between
December 14 and December 24,
2010, with a margin of error of 1.6
percentage points. Vistage International
serves more than 14,000
members in 15 countries. Vistage
member CEOs participate in chairled
advisory board peer groups, receive
one-to-one coaching, learn from
expert speakers, and interact among
a global network of CEOs from a
broad range of industries.
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