How Small Business Works: A periodic look at the trends and forces that impact small businesses

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1 Going Mobile: Small business owner attitudes about mobile technologies How Small Business Works: A periodic look at the trends and forces that impact small businesses An Online National Survey of Small Business Owners, July-August 2012

2 Going Mobile: Bank of the West/Harris Interactive 2012 National Survey of Small Business Owners Bank of the West commissioned the independent research firm Harris Interactive to conduct an online study of small business owners across the U.S. about their use, attitudes and hopes for mobile technology, including mobile phones, smartphones, tablets and the applications and programs that run on them. Here are the results:* Two-thirds of all small business owners surveyed reported that mobile technology was at least somewhat important to the current success of their business and three out of four respondents expect that it will be become more important to their success in the future. Small business owners are decisive on who can best benefit from mobile technology individuals, entrepreneurs and small businesses. 1How important is mobile technology, such as applications and programs that run on mobile phones, smart phones and tablets to the current success of your business today? 2 11% 19% Extremely important Very important Somewhat important Not at all important How important is mobile technology, such as applications and programs that run on mobile phones, smart phones and tablets to the future success of your business today? 3In your opinion, which of the following can benefit from the use of mobile technologies? 26% 38% 13% Extremely important Very important Somewhat important Not at all important 76% 74% 83% 83% Individuals/entrepreneurs Small businesses Mid-sized companies Large corporations 4% None Two out of three Small Business Owners who use mobile technologies agree that they have increased efficiency for their businesses, and three out of five respondents say they serve functions that cannot be completed as efficiently through other means. 4How much do you agree/disagree with the following statement? The use of mobile technologies has increased efficiency for my business. 17% 26% 15% 42% 5How much do you agree/disagree with the following statement? Mobile technologies serve function in my business that cannot be completed as efficiently through other means. 16% 24% 37% * Percentages have been rounded to the nearest whole number

3 Three out of five of small business owners wish mobile technology was more relevant to their business, and that is the biggest barrier to taking advantage of them far above cost and time and technical expertise. Among the tasks that small business owners find timeconsuming, they wish mobile technology could better address payment issues in particular, the ability to accept payments from customers. 6How much do you agree/disagree with the following statement? I wish there were more mobile technologies relevant for my business. 27% 14% 15% 44% 7What is the biggest barrier for you for taking advantage of mobile technologies for your business? 8What are the top time-consuming tasks for your business that you wish mobile technology could better address? 33% Few relevant uses for my business 25% Cost 14% Making time to learn which technology is right for my business 11% Lack of technical expertise 7% Security concerns 4% Lack of time to install and implement 7% Other (primarily includes mentions of network issues: reliability, coverage area, access speed) 33% Payment acceptance from consumers 24% Monitoring financial accounts 19% Expense reports 14% Inventory tracking 12% Payments to suppliers 36% Other (includes mentions of project management, scheduling and calendars, invoicing and payroll, access to records and documents on other computers) ABOUT THE RESPONDENTS ABOUT THEIR BUSINESSES METHODOLOGY AVERAGE AGE % 37% 63% Male years EDUCATION College degree or higher Earned graduate degree 25% GENDER Female AVERAGE AGE OF BUSINESS years AVERAGE NUMBER OF NON-OWNER EMPLOYEES LARGEST CATEGORIES OF BUSINESSES REPRESENTED Professional and Business Services 60% Retail GROSS REVENUE UNDER $500K This survey was conducted online within the United States by Harris Interactive, one of the world s leading market research firms, on behalf of Bank of the West between July 30 August 29, 2012 among 504 owners of small businesses (defined as having 2 or more employees and less than $10 million in annual revenue). No estimates of theoretical sampling error can be calculated; a full methodology is available.

4 While a third of small business owners have made no investment in mobile technology, well over half who had made an investment saw a positive return. For most of those small business owners, the return was primarily on target or exceeded their expectations. The typical investment is 5% of annual operating expenses, and is projected to grow by an additional 5% over the next two years. 9What level of financial return have you seen on your investment in mobile technology use? 11% 32% 12% 45% RATE OF RETURN Outstanding (100% or greater) Moderate (1-99%) Broke even Lost money 33% No investment in mobile technologies Base: Invest in mobile technology 10 Was your financial return on your mobile technology investment what you expected? % 7% 66% 8% 3% Significantly higher than expected Somewhat higher than expected On target with expected Somewhat lower than expected Significantly lower/disappointing Base: Invest in mobile technology What percentage of your annual operating expenses have you invested in purchase, installation and ongoing use of mobile technologies? 5% 5% median Base: Invest in mobile technology By how much do you expect your investments in mobile technologies to grow in the next 2 years? median Base: Invest in mobile technology Small business owners currently use mobile technologies most often for communication (presumably , text messaging and phone calls), calendars and scheduling and GPS/navigation. But where they see the most significant potential for mobile technologies is in CRM (customer relationship management databases), marketing and making and receiving payments Which of the following does your business use mobile technologies for? In what part of your business do you see significant potential for mobile technology use? Current Potential 76% Communication 68% 19% CRM Database 31% 16% Ordering and inventory management 21% 42% GPS/Navigation 40% 18% Marketing 15% Project management 48% Calendars and scheduling 47% 17% Making and receiving payments 31%

5 bankofthewest.com Doing Business as Bank of the West California in South Dakota. Equal Housing Lender. Member FDIC.