Sixty Percent of U.S. Small Businesses Concerned About Effect of Taxes on Their Business, According to Constant Contact Survey

WALTHAM, MA – As taxpayers across the country prepare for the April 17th deadline, small business owners, while expressing confidence about the current economy, are worried about their existing tax rate and its effect on their business. According to Constant’s Contact 2006 Small Business Tax Outlook* survey, while 58 percent of U.S. small business owners said they have a positive outlook for the U.S. economy, 60 percent are concerned about the effect of taxes on the health of their business and 64 percent said their current small business tax rate is too high. Constant Contact® (www.constantcontact.com) is the leading email marketing service for small businesses, associations, and nonprofits.

The survey also revealed that 38 percent of small businesses typically get a tax refund. Of those who do receive money back, 50 percent reinvest their refund into their business by spending it on marketing and advertising initiatives. Other ways small businesses use/or would use tax return funds is on hardware and equipment, and new product or service lines.

The lack of a refund incentive may be causing some small businesses to hold off the tax process until late in the tax season. Forty-three percent of those surveyed said they wait until the final month before the tax deadline, filing in March or April.

“Although many small business owners are concerned that their tax may be too high, the good news is that this survey shows that small businesses remain confident in their growth prospects and the strength of the U.S. economy,” said Gail Goodman, CEO of Constant Contact. “It’s also encouraging to note that for those small businesses expecting a refund, their refund dollars are earmarked for marketing initiatives, which shows the vital role that marketing plays in helping them achieve their business growth objectives.”


When it does come time to file, most small business owners are turning to finance professionals to do the work, as 52 percent said they retain an accountant to prepare and file taxes for their business. The next most popular way small businesses owners take care of their taxes is by doing it themselves, with 26 percent preparing and filing their business’ taxes manually or by using online tools. A minority of small businesses turn to independent/locally-based tax firms (15 percent), or the local branch offices of nationally-based tax firms (7 percent).

Tax Professionals See Strong Sales
Among small businesses who sell tax-related services, 72 percent anticipate strong sales for this tax season, with 79 percent of them stating that they run special marketing activities around their services. When asked what marketing methods they employ, 74 percent said they use email marketing to promote their services, following by online marketing (52 percent), flyers (48 percent), advertising (TV, radio, or newspaper) at 35 percent, and direct mail (30 percent). When asked what marketing methods have the greatest impact on sales, email marketing and online marketing, led the pack with each receiving 30 percent of the vote, followed by direct mail (22 percent), flyers (9 percent) and advertising (TV, radio, or newspaper) at 9 percent.

*The 2006 U.S. Small Business Tax Outlook survey was conducted through targeted online distribution to U.S. small business owners, who are current customers of Constant Contact, recording results from more than 275 respondents. The survey was conducted from February 22nd through March 10th, 2006.

About Constant Contact

With over 50,000 customers, Constant Contact® is the leading email marketing service for small businesses, associations, and nonprofits. Constant Contact is a web-based email marketing solution that enables small organizations to easily create and send professional email newsletters, promotions, announcements and more with no technical expertise required. Designed and priced for SMBs, Constant Contact is affordable, easy-to-use and includes a free 60-day trial at: www.constantcontact.com. The service is marketed through over 1,500 Business Partners and more than 100 marquee channel partners including American Express OPEN, AOL, Corel, FTD, IBM, Interland, Network Solutions, Register.com, Website Pros and Yahoo Search Marketing. Constant Contact is a founding member of the Email Service Provider Coalition (ESPC), a group formed to fight spam while protecting the delivery of legitimate email. Constant Contact is funded by Morgan Stanley Venture Partners, Commonwealth Capital Ventures, Longworth Venture Partners and Hudson Ventures. For more information, please call 781-472-8100.

Roving, Roving Software, Constant Contact, the Constant Contact Logo, Do-It-Yourself Email Marketing, The smart way to reach your customers, Email Marketing Made Easy, Email Marketing 101, Email Marketing Diva, Email Marketing Hints & Tips, and SafeUnsubscribe are trademarks or service marks or registered trademarks or service marks of Roving Software Incorporated d/b/a Constant Contact. All other company and product names may be trademarks or service marks of their respective owners.

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Contacts:

Kevin Mullins
Constant Contact
(781) 472-6206
kmullins@constantcontact.com

Tom Francoeur
Topaz Partners
781-388-7900 x205
tfrancoeur@topazpartners.com