Press Release:

HP Surveys Nation's Small Businesses to Learn What Fuels the Engines of Today's Economy

Entrepreneurs weigh in on business challenges, community involvement, technology and future spending
WASHINGTON, April 27, 2005

HP today 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 events being held in Washington, D.C., polled nearly 400 small businesses nationwide in early March.

Survey results showed that community involvement and supporting local businesses are high priorities for small business owners. More than half of the survey respondents were women, who reported that being a role model, teaching others and giving back to their community are key motivators. Wealth was less important to women when considering whether to start their own business.

"This survey highlights the optimism of small business owners and underscores the growing importance of technology to solve their day-to-day business challenges," said Kevin Gilroy, senior vice president and general manager, Small and Medium Business, HP. "As the leading global technology provider to small and mid-size businesses, HP is passionate about understanding entrepreneurs, from their business challenges to their personal aspirations. The survey confirms that the HP Smart Office initiative is on the right track by providing a simple, easy-to-understand approach to technology."

HP's Smart Office program provides small and mid-size business customers with reliable, high-quality products and solutions; local and specialized expertise; and a simplified experience with technology. Whether it's a complete family of reliable mobile products and solutions, tools and technology for developing marketing materials or local service and support through a network of local partners, HP delivers a superior ownership experience, so customers spend less time worrying about technology and more time focused on their businesses.

Technology is the spinal cord of small business

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 websites, online services and weblogs) 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. Small businesses are also leveraging the blog phenomena with one out of 10 reporting that weblogs are part of their marketing plans.

Investing in mobile technology was on many small business owners' lists, with notebook computers the top technology addition over the next year. On average, respondents reported spending more than a quarter (27 percent) of their time working outside of their offices. Thirty-two percent consider notebook computers critical to their businesses and 36 percent think they help them stay competitive with larger companies. Thirty-six percent plan to incorporate notebooks as part of their technology suite in the next year.

Overall trends

Business operations are a primary challenge for small businesses owners. Eight out of 10 (80 percent) 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.

Community involvement was at the heart of many small business owners' answers. When asked what they liked most about being a small business owner, 72 percent said making a contribution to the local community. The survey found that small businesses support their local community most commonly by making financial donations to charities (79 percent), hiring employees from their local community (64 percent) and volunteering their time (64 percent). In addition, those who use a local company for technology service and support said their No. 1 reason for doing so was because they prefer supporting local businesses (85 percent).

"As counselors to thousands of small businesses across the country, we see firsthand how small business owners strongly value their ability to give back to the community around them," said Ken Yancey, chief executive officer, SCORE. "Helping companies find a better way to operate and succeed is the kind of work that SCORE counselors facilitate every day. The results of the survey confirm the importance of the success of small business to the local and national community."

Women-owned businesses

According to the U.S. Small Business Administration, the estimated growth rate in the number of women-owned firms was nearly twice that of all firms (17 percent vs. 9 percent) between 1997 and 2004. Responses from this fastest growing group of small business owners in the United States showed that they are seeking more than financial rewards. For women surveyed, giving back to the community (75 percent), teaching others (66 percent) and being a role model (60 percent) were high priorities. When asked what prompted them to start their own businesses, only 55 percent cited creating wealth.

"Women have growing economic power and influence, so it is not a surprise that women-owned businesses are on the rise," said Karen Kerrigan, president and chief executive officer, Women Entrepreneurs Inc. "The results of the survey confirm what we are seeing among the growing ranks of women entrepreneurs that are looking to adopt technology to strengthen their business."

Survey methodology

The HP Small Business Survey was conducted by Harris Interactive, Inc. among 399 small business owners or senior level employees age 25-64 at companies with fewer than 100 employees. Interviews were conducted by telephone between March 3-15, 2005. Data are unweighted and therefore only representative of the sample interviewed. The margin of error for the total sample is plus/minus 5 percentage points. Sampling error for the following sub-sample results: females (208), those planning to invest in technology over the next two to three years (242), and those who use a locally based company for its after-purchase technology support and service (188).

More information on the survey findings and HP's activities to celebrate National Small Business Week is available at

About HP

HP is a technology solutions provider to consumers, businesses and institutions globally. The company's offerings span IT infrastructure, global services, business and home computing, and imaging and printing. For the four fiscal quarters ended Jan. 31, 2005, HP revenue totaled $81.8 billion. More information about HP (NYSE, Nasdaq: HPQ) is available at

This news release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they ever materialize or prove incorrect, could cause the results of HP and its consolidated subsidiaries to differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including the expected development, performance or rankings of products or services; statements of expectation or belief; and any statement of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the development, performance and market acceptance of products and services and other risks that are described from time to time in HP's Securities and Exchange Commission reports, including but not limited to HP's Quarterly Report on Form 10-Q for the fiscal quarter ended Jan. 31, 2005, and other reports filed after HP's Annual Report on Form 10-K for the fiscal year ended Oct. 31, 2004. HP assumes no obligation and does not intend to update these forward-looking statements.

About HP

HP Inc. creates technology that makes life better for everyone, everywhere. Through our portfolio of printers, PCs, mobile devices, solutions, and services, we engineer experiences that amaze. More information about HP Inc. is available at