Although most of us might assume that growth-oriented owners would plow big profits back into their businesses, a recent survey by the American Institute of Certified Public Accountants (AICPA) found that small-business owners were more interested in using earnings to reduce their debt loads -- perhaps in response to last summer's climate of rising interest rates.
| What would you do with a | |
| significant profit increase?* | % of respondents |
| Pay down debt | 46.2% |
| Expand facilities | 22.0% |
| Increase owner salaries/bonuses | 20.3% |
| Increase retirement-plan funds | 13.2% |
| Hire new people | 13.2% |
| Fund product research and development | 5.5% |
| Increase employee salaries/benefits | 2.2% |
| Make capital improvements | 2.2% |
| Build cash reserves | 1.1% |
| Other | 1.1% |
Note: Multiple answers were permitted.
Source: "Small Business Survey," AICPA Private Companies Practice Section, New York City, July 1994.
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