WASHINGTON - Hewlett-Packard (HP) has released a survey that shows the primary challenges for U.S. small businesses are core business issues: operations, customer relations, and employee relations. But even as they focus on the basics, small business owners have an eye on the future with plans to significantly increase technology spending and adoption of new technologies.

The survey, conducted by Harris Interactive® and released in conjunction with National Small Business Week, polled nearly 400 small businesses nationwide in March.

Business operations are a primary challenge for small businesses owners. Eighty percent of respondents cited operations such as reducing costs or cash management as one of their top challenges. Customer-related issues such as customer retention and acquisition were cited by 44 percent of survey respondents as a key challenge; employee-related issues posted a similar response at 43 percent. Employee issues are largely driven by health insurance coverage - a concern for nearly one third (32 percent) of small business owners.

Survey respondents were upbeat about investing in their small businesses. Ninety-four percent plan to dedicate additional financial resources during the next two to three years to reduce operational costs with technology another key area for increased spending.

Survey respondents believe that technology is essential to the operations and success of their businesses. Eighty-one percent plan to increase technology spending in a variety of ways (for example, company Web sites and online services) over the next two to three years. Small businesses that plan to increase overall technology spending anticipate doing so by 20 percent on average.

In addition, 68 percent of those surveyed reported that they plan to adopt additional technology products in the coming year.

Publication date: 05/02/2005