Factors Helping and Hurting Businesses in this Economy

by Eric Stokan 19. May 2010 07:14

Recently, the Center for Urban Studies conducted a nationwide study of businesses.  Our sample was divided between incubated firms (35.4%) and non-incubated firms (64.6%). Roughly 900 new businesses between incubated and non-incubated firms (average= 15 years; median =8 years) responded to our survey which asked them, among other questions, which factors were the biggest limit and support to the “survival and/or growth of your organization” as well as what factors “would be the most helpful thing for your business currently?”  This entry highlights our preliminary findings in this regard.


BIGGEST LIMITING FACTOR:The top 10 limiting factors may come as little surprise to most businesses and economic developers with few exceptions.  The most frequently cited (179) limit was none other than the economy or economic factors.  This was closely followed by the lack of capital/financing (177).  Other financial concerns included Revenue/Sales (44) as well as the business/market environment (59) and other businesses/competitors (35).The government at the federal, state, and local levels also played a multifaceted role as a big limiter in some business start-ups eyes.  This included the lack of general support or involvement in their business (46) which posed a greater challenge for them than problems with regulation or taxes (30).Other honorable mentions included factors systemic to the business such as their business development (marketing, networking, and planning; 55) and the management/personnel and organizational structure of the firm (34). 

TABLE 1: Top 10 Biggest Limiting Factors

Rank Frequency Biggest ‘Limiting’ Factors
1 179 Economy/Other Economic Factors
2 177 Capital/Funding- Access to Capital
3 59 Business/Market Environment
4 55 Business Development (Marketing, Networking, Planning)
5 46 Federal/State/Local Government Support/Involvement
6 44 Revenue/Sales (Making a Profit)
7 41 Business from Clients/Customers
8 35 Other Business/Competitors
9 34 Management/Personnel and/or Organizational Structure
10 30 Regulation/Taxes (Federal/State/Local)

BIGGEST SUPPORT: On the other hand, businesses said the largest supporting factor was their own business development activities (marketing, networking, and planning; 140). The next four supporting factors included business from clients (80), revenue or sales (78), economy and other economic factors (74) and capital and funding (74).  This list included business characteristics (leadership, durability, perseverance, and professionalism; 62) as well as respondents who thought the business was doing well because of his or herself (32) or customer responsiveness to their products (36).  While 46 firms thought Federal/State/Local government support/involvement was a limiting factor, 35 thought it was the biggest supporting factor. 


TABLE 2: Top 10 Biggest Supporting Factors

Rank Frequency Biggest ‘Supporting’ Factors
1 140 Business Development (Marketing, Networking, Planning)
2 80 Business from Clients/Customers
3 78 Revenue/Sales (Making a Profit)
4 74 Economy and Other Economic Factors
4 74 Capital/Funding- Access to Capital
6 69 Business/Market Environment
7 62 Business Characteristics (Leadership, Durability, Perseverance, Professionalism)
8 36 Customer Responsiveness/ Quality of Product or Service
9 35 Federal/State/Local Government Support/Involvement
10 32 Me/Myself (Business Owner)

BIGGEST HELP: While we have a sense of what the biggest limit and biggest support for these firms are, of course, we want to know what could be most helpful for the firm.  Again, more access to capital (145), a better economy (95), and more or continued business/customers (84) would be the most helpful.  Similarly on the economic side, more or better business/financial services (71) as well as an increase in sales/revenue (37) and a better business environment (31) were all important.  Nonetheless, there were other very important factors more internal to the business that they seek improvement on like an improved business model (84) and additional/better personnel (30).  On the government side, they seek fewer regulations and more tax breaks (37).  However, 32 admitted that they just “don’t know” what could improve their business.


TABLE 3: Top 10 Most Helpful Factors

Rank Frequency What Would be Most ‘Helpful’ to Your Business
1 145 Additional Capital/Funding
2 95 Better Economy
3 84 More or Continued Business/Customers
3 84 Improved Business Model (Better Marketing, Better Leads, Enhanced Products)
4 71 Access to more or better Business/Financial Services
6 42 Fewer Regulations/Tax Breaks or Improved Tax Laws
7 37 Increase in Sales/Revenue or Assistance with Sales/Revenue
8 32 Don’t Know
9 31 Better Business/Market Environment
10 30 Additional/Better Personnel


In comparing Tables 1-3, one can certainly see a good deal of overlap between the biggest limit, support, and what would help fledgling businesses the most.  Therefore, table 4 includes the rankings for each of the top 10 by limit, support, and help. 


TABLE 4: Overall Factors by Rank

  Limit Rank Support Rank Help Rank
Economy/Economy Factors (Want Better) 1 4 2
Capital/Funding 2 5 1
Business/Market Environment 3 6 9
Business Development needs (Marketing, Networking Planning) 4 1 -
Federal/State/Local Government Support/Involvement 5 9 -
Revenue/Sales (Making a profit) 6 3 7
Business from Clients/Customers (Want more) 7 2 3
Other Business/Competitors 8 25  
Management/Personnel and or Organization Structure 9 11 10
Regulation/Taxes (Federal, State, Local) 10 18 6
Business Characteristics (Leadership, Durability, Perseverance, Professionalism) 19 7 22
Customer Responsiveness/Quality of Product or Service   8 27
Me/Myself (Business Owner) 15 10 -
Improved Business Model (Better Marketing, Leads, and Enhanced Products) - - 3
Access to More or Better Business/Financial Services 12 12 5
Don't Know 11 15 8

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About the Authors

We are the Center for Urban Studies Economic Development Unit.  We have several authors who contribute directly and indirectly to this blog.

Lyke Thompson, Ph.D.

Director of the Center for Urban Studies and Professor in Wayne State University's Political Science Department, has specialized his research on the urban political and economic environment.  A primary focus has been centered on municipal economic development, urban policy, and the determinants of economic growth.

Eric Stokan, MA.

Research assistant at the Center for Urban Studies Economic Development Unit.  Mr. Stokan serves as the lead researcher of the Unit, analyzing economic data using various statistical techniques.  Mr. Stokan is interested in questions concerning municipal economic growth and industry mix as well as determinants of local economic incentive adoption.

Mary Hennessey

Research technician at the Center for Urban Studies Economic Development Unit.  Ms. Hennessey researches the effectiveness of local economic development incentives.  Specifically, she has conducted a thorough investigation of brownfields and is currently working on public transit.