Comparing Small & Mid-Sized Businesses Across America
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Transcript of Comparing Small & Mid-Sized Businesses Across America
SMBInsights2016
REGIONAL PERSPECTIVESSmall & Mid-Sized Businesses Across America
5-499 Sized Companies
National Market Studyvia
TelephoneàInternet
Fielded January 2015
Owners/Partners, C-Suite, Key
Decision Makers
2
Research Method
Interviews per Market:
272 Northeast471 South
316 Midwest309 West
Preface
3
Small and mid-sized business owners, no matter where they live in the United States, are an elite group. Their ranks consist largely of men (66%) who are well educated and upscale. Their businesses are well-established and moderately sized (23.9 employees on average). In 2014, their annual sales reached an average of $7.7M. The large majority (93%) generate sales in their local market.
The purpose of this analysis is to highlight the differences in the behaviors and attitudes of SMB owners that occur across the four Census regions. As this report details, some of these differences are quite pronounced, while others are more subtle and nuanced. Taken in total, the hope is to provide a fuller view of SMB owners across the country, and help to ensure that each region’s particular dialect of business is more fully understood.
Note: A +/- 4% point difference between regions is statistically significant at the 90% confidence level or higher.
REGIONAL PERSPECTIVES
Insights2016SMB
4
PageExecutive Summary 5Regional Snapshot 6Western SMBs 7Southern SMBs 15Midwestern SMBs 23Northeastern SMBs 31Regional Summary 39
Executive Summary
5
Small and mid-sized business owners share many characteristics no matter where they happen to live. Yet, each region shows interesting characteristics, attitudes and approaches that sets it apart from all the others.
Western SMBs: Change AgentsWestern SMBs zig when the rest of the country’s SMBs zag. They strongly see themselves as leaders and visionaries. They join local organizations and Boards to make their voices heard. They care about the environment, see technology as a badge, and display a lot of diversity and new ways of working. Skills shortage is a major concern.
Southern SMBs: DrivenSouthern SMBs do not have the sales and income levels of the northeast and west, but they are on a mission to change that. Their annual sales growth rate is testament to their efforts;; it is the second growth region in the country. Southern SMBs are autonomous decision makers, are concerned about taxes, and are driven to achieve financial success. One big standout: half are Republicans, the highest level of any region in the country.
Midwestern SMBs: Status QuoMidwestern SMBs are the most laid back of any region in the country. They run the largest, most well-established businesses;; and support their employees well by providing a host of benefits. They display the strongest local focus of any region, perhaps due to being located in more non-urban settings than the other SMBs. Technology is not their forte: nearly half find it hard to keep up, and their adoptions rates are lower than other SMBs. They are not the wealthiest SMBs, but are the ones most confident they will have enough money to retire. In this area, they are covered.
Northeastern SMBs: AchieversNortheastern SMBs are the most affluent and well educated of all regions, and also the hardest working. Their annual sales are the highest, even though their sales are not increasing at the high clip of SMBs in the South and West. Their businesses are mostly in white collar industries (e.g., services). Although 87% generate sales locally, their reliance on their local community for sales success is lower than SMBs in other regions. Their adoption of technology lags slightly, even though they are quick to point out that they have no difficulty keeping up with the latest and greatest.
6
REGIONAL SNAPSHOT
Change Agents1.79M Businesses (+.80% v 2014)
24% of SMB owners
Status Quo1.63M Businesses (+.28 v 2014)
22% of SMB owners
Driven2.66M Businesses (+.44% v 2014)
35% of SMB owners
*Businesses with 1-999 employees (no sole proprietors)Source: Small Business Research, Q4 2015 projection (based on CENSUS data)
Insights2016SMB
7
WESTERN SMBs:CHANGE AGENTS
Western SMBs strongly see themselves as leaders & visionaries...more so than SMBs in other regions
8
79%
74%75%
69%
I often find myself in a leadership position I am forward thinking-have a vision
Western SMBs Other 3 Region Average
“Following are a series of statements that may/may not reflect how you think about business, or life in general. Please indicate whether you agree/disagree with each one, using a 0-to-10 scale.”
Business Attitudes Among Western SMBs
Western SMBs are highly successful; they run smaller, younger companies, with high sales and strong sales growth
9
$183K
22.3
$9.8M
25.8
$199K
24.8
$7.6M
20.6
Household Income (avg)
# Employees (avg) Annual Sales (avg) Annual sales % Increase*
Western SMBs Other 3 Region Average
*Among companies with sales increases…roughly 70% of companies across all regions
Western SMBs -- Key Indicators
22%
10%
Under 10 Years in Operation
Western SMBs Other 3 Region Average
Western SMBs include more women and minority-owned businesses; they are less inclined to hunt & fish
10
37%
22%28%
15%
Women-Owned Businesses Minority-Owned Businesses
Western SMBs Other 3 Region Average
5%
-7%
4%5%
-15%
-9%
88%
66%55%
36% 33% 33%
-130%-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
Difference Vs. Other 3 Regions Westerm SMBs
Lifestyle Activities % Engage in Regularly/Occasionally
Women & Minority Ownership
“Would you describe your company as women-owned, that is, is 50% or more of your company owned by women?” “Is 50% or more of your company owned by a Hispanic, African-American, Native-American, Asian or any other members of a racial or ethnic minority group?” “How frequently do you engage in each of the activities listed below?”
33% 33%
31% 31%
17% 16%
Western SMBs Other 3 Region Average
11
SMB owners in the West are confident in the success of their companies; they are planning to expand dramatically
Extremely Confident
Confident
Very Confident
81% 80%
Confidence in Own Company Success Next 24 Months
74%
74%
77%
82%
Other 3 Region Average
Western SMBs
2015
2014
Percentage Planning to Hire New Full-Time Employees in the Next Year
“What is your level of confidence in the success of your company (based on revenue, profitability & growth) over the next 24 months?” “Approximately how many full-time employees are you planning to hire over the next 12 months?”
Despite higher unemployment rates, Western SMBs exhibit the highest degree of concern about finding the ‘right’ employees
12
54%
48%
Western SMBs Other 3 Region Average
Very Concerned About Finding & Keeping Good Employees
5.5%
6.4%
4.9%
5.4%
Other 3 Region Average
Western SMBs
Dec-15
Dec-14
Unemployment Rate
Source: Bureau Labor Statistics, Regional and State Employment and Unemployment, December 2015“Let’s face it you’re one of the people in your business who has to be concerned with all of the issues related to running the business. So what are the issues that you’re most concerned about?”
Western SMBs are more concerned about the environment and global warming; they join organizations to make changes
13
50%
58%
57%
62%
Very/Somewhat concerned about the world environment
& global warming
Agree that company respects 'green' values & is
conscious of the environment
Western SMBs Other 3 Region Average
36% 36%30% 31%
Served on committee/officer for local organization
Served on Board of Directors
Western SMBs Other 3 Region Average
“Following are a series of statements that may/may not reflect how you think about business, or life in general. Please indicate whether you agree/disagree with each one, using a 0-to-10 scale.” “Let’s face it – you’re one of the people in your business who has to be concerned with ALL of the issues related to running the business. So what are the issues that you’re most concerned about?”
Environmental Attitudes Civic Activities
Western SMBs see technology as a badge and are heavy users of multiple technology products & services
14
57%
52%
Western SMBs Other 3 Region Average
“The Kind of Technology I Have Reflects the Type of Business Person I Am”
% Agree Completely/Mostly
Product and Services Used Past Year for Business
36%
38%
40%
53%
66%
42%
44%
46%
59%
71%
Online providers (LinkedIn, Monster)
for recruitment
Email marketing
Ethernet & data networking
Apps
Laptop computers
Western SMBs Other 3 Region Average
“Please indicate the extent to which you agree or disagree with each of the following statements about technology.” “Which of the following products or services have you used in the past year for your business?” “Where do you plan to source your new hires from?”
15
Western Summary
*Businesses with 1-999 employees (no sole proprietors)Source: Small Business Research, Q4 2015 projection
+25.8%sales growth
‘green’&
diversityExpansion…Skills shortage concern
Change Agents1.79M Businesses (+.80% v 2014)
24%
Insights2016SMB
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SOUTHERN SMBs:DRIVEN
Southern SMBs run somewhat smaller & younger companies, with lower sales, yet high sales growth
17
$166K
22.324.6
$5.7M
24.9
$194K
24.827.5
$9.0M
20.9
Household Income (avg) # Employees (avg) Years In Operation (avg) Annual Sales (avg) Annual sales % Increase*
Southern SMBs Other 3 Region Average
Southern SMBs -- Key Indicators
*Among companies with sales increases…roughly 70% of companies across all regions
Southern SMBs comprise an average share of women and minority-owned businesses; they like sports, jogging & hunting
18
33%
15%
29%
13%
Women-Owned Businesses Minority-Owned Businesses
Southern SMBs Other 3 Region Average
“Would you describe your company as women-owned, that is, is 50% or more of your company owned by women?” “Is 50% or more of your company owned by a Hispanic, African-American, Native-American, Asian or any other members of a racial or ethnic minority group?” “How frequently do you engage in each of the activities listed below?”
7%5% 5%
-6%-4% -4%
81%
53%43% 38%
29%22%
-130%-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
Difference Vs. Other 3 Regions Southern SMBs
Lifestyle Activities % Engage in Regularly/Occasionally
Women & Minority Ownership
32% 33%
35% 30%
17%16%
Southern SMBs Other 3 Region Average
19
SMB owners in the South are highly confident in the success of their own companies, and exhibit modest expansion plans
Extremely Confident
Confident
Very Confident
84%79%
Confidence in Own Company Success
73%
75%
79%
78%
Other 3 Region Average
Southern SMBs
2015
2014
Percentage Planning to Hire New Full-Time Employees in the Next Year
“What is your level of confidence in the success of your company (based on revenue, profitability & growth) over the next 24 months?” “Approximately how many full-time employees are you planning to hire over the next 12 months?”
Southern SMBs make purchase decisions more autonomously than other regions & are driven by financial gains
20
25%
29%
30%
30%
34%
35%
37%
40%
29%
35%
36%
37%
39%
39%
41%
46%
Commercial real estate
Marketing
Business Software
Technology Hardware
Financial/Investments
Business Insurance
Telecom
Accounting
Southern SMBs Other 3 Region Average
Purchase Decision Making by Industry‘I Make the Decision Myself without Seeking
Advice from Others’
47%
42%
Southern SMBs Other 3 Region Average
“The Amount of Money I Make is More Important Than What I Do”
% Agree
“Following are a series of statements that may/may not reflect how you think about business, or life in general. Please indicate whether you agree/disagree with each one, using a 0-to-10 scale.” “Your company undoubtedly interacts with & uses the services of many industries. Please indicate how vendor & brand decisions are made by your company for each industry listed below…You make the decision by yourself.”
Half of southern SMBs are Republicans; they have greater concern about taxation on their businesses
21
Republican50%
Independent23%
Democrat15%
Other/None12%
Republican40%
Independent28%
Democrat20%
Other/None12%
Southern SMBs
Other 3 Region Average
Political Affiliation
42%
47%
Other 3 Region Average
Southern SMBs
Very Concerned About‘Possible Tax Changes that Could Hurt
Your Business’
“Politically, do you consider yourself…?” “Let’s face it – you’re one of the people in your business who has to be concerned with ALL of the issues related to running the business. So what are the issues that you’re most concerned about?”
Southern SMBs are less inclined to view technology as a badge; nonetheless, they are avid technology users
22
49%
54%
Southern SMBs Other 3 Region Average
“The Kind of Technology I Have Reflects the Type of Business Person I Am”
% Agree Completely/Mostly
Product and Services Used Past Year for Business
31%
40%
47%
53%
67%
73%
37%
45%
51%
59%
71%
78%
Mobile/internet payment devices
Ethernet & data networking
Tablet
Apps
Text messaging
SmartPhone
Southern SMBs Other 3 Region Average
“Please indicate the extent to which you agree or disagree with each of the following statements about technology.” “Which of the following products or services have you used in the past year for your business?”
Social media is an important tool that Southern SMBs use to move their businesses forward…significantly more than other regions
23
73%
30%
68%
25%
Use Social Media for Business Generate Revenue Directly from Social Media
Southern SMBs Other 3 Region Average
Social Media Usage for Business
“Which of the following Social Networks do you or your company currently use?” “Has your company generated revenue directly from Social Media?”
24
Southern Summary
*Businesses with 1-999 employees (no sole proprietors)Source: Small Business Research, Q4 2015 projection
+24.9%sales growth
50%
AutonomousHighly confident Driven
2.66M Businesses (+.44% v 2014)35%
MIDWESTERN SMBs:STATUS QUO
Insights2016SMB
25
Midwest SMBs skew toward non-urban areas (C/D counties); and generate lower sales and personal income than other regions
26
$179K
$1.55M
$5.5M
19.7$194K
$1.56M
$9.0M
22.6
Household Income (avg)
Net worth (avg) Annual Sales (avg) Sales % Increase (avg)*
Midwestern SMBs Other 3 Region Average
Midwestern SMBs – Key Indicators
66%
32%
72%
18%
College Grad+ C/D Counties
Midwestern SMBs Other 3 Region Average
*Among companies with sales increases…roughly 70% of companies across all regions
Midwest SMBs run larger, more well established companies; their sales are more locally focused than other regions
27
32.026.125.0 23.5
Years in Business (avg.) # of Employees (avg.)
Midwestern SMBs Other 3 Region Average
Midwestern SMBs -- Other Business Indicators
Midwestern SMBs
Other 3 Region Average
Generate Any Sales
Locally 98% 91%
Nationally 57 63
Internationally 23 28
“Including yourself, how many full-time employees does your company have in total, that is, at all locations including all the divisions, subsidiaries and branches of your company?” “How many years has your company been in operation?” “Let’s get a quick overview of the geographic markets your company serves. Using 100 % points, how would you break down your company’s 2014 sales among the following three categories: within your local area, the rest of the US, outside the US.”
Midwest SMBs comprise fewer minority-owned businesses; in general, they like sports, hunting & volunteering locally
28
30%
8%
30%
15%
Women-Owned Businesses Minority-Owned Businesses
Midwestern SMBs Other 3 Region Average
“Would you describe your company as women-owned, that is, is 50% or more of your company owned by women?” “Is 50% or more of your company owned by a Hispanic, African-American, Native-American, Asian or any other members of a racial or ethnic minority group?” “How frequently do you engage in each of the activities listed below?”
7%5%
-10%
9%
-6%
8%
81% 78% 77%
46% 44% 40%
-130%-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
Difference Vs. Other 3 Regions Midwestern SMBs
Lifestyle Activities % Engage in Regularly/Occasionally
Women & Minority Ownership
35% 32%
26% 33%
17% 16%
Midwestern SMBs Other 3 Region Average
29
Midwest SMBs are less confident in the success of their own companies; yet their expansion plans are on par with other regions
Extremely Confident
Confident
Very Confident
Confidence in Own Company Success
74%
73%
79%
78%
Other 3 Region Average
Midwestern SMBs
2015
2014
Percentage Planning to Hire New Full-Time Employees in the Next Year
78% 81%
“What is your level of confidence in the success of your company (based on revenue, profitability & growth) over the next 24 months?” “Approximately how many full-time employees are you planning to hire over the next 12 months?”
Among Midwest SMBs who provide employee benefits, the degree of coverage is greater than that of other regions
30Offer Employee Benefits/Health Insurance: Northeast (68%), Midwest (64%), South (66%), and West (67%) “What insurance benefits do you offer your employees?“
Offer Employee Benefits & Health Insurance
Insurance Benefits Offered to Employees(Base: SMBs Offering Benefits)
21%
26%
35%
35%
38%
85%
25%
30%
42%
43%
55%
85%
Accident insurance
Hospital insurance
Retirement/Pension Plans
Disability Insurance
Life Insurance
Health insurance
Midwestern SMBs Other 3 Region Average
64%
67%
Midwestern SMBs Other 3 Region Average
Despite lower incomes, Midwest SMBs have less concern about their financial futures; they rely heavily on financial professionals
31
Not Very Concerned About Having Enough Money to Retire
“Let’s face it – you’re one of the people in your business who has to be concerned with ALL of the issues related to running the business. So what are the issues that you’re most concerned about?” ”What percentage of your personal investment portfolio consists of investments purchased for you by a financial planner or investment company?” “How much do you agree or disagree with the following statements about your personal finances and investments?”
61%52%
Midwestern SMBs Other 3 Region Average
48%
59%
80%
59%
66%
84%
Share of portfolio purchased by investment professional
Use a financial planner to help me manage my wealth
It's important to seek professional help in making
investment decisions
Midwestern SMBs Other 3 Region Average
(Agree Strongly/Somewhat)
Attitudes About Personal Investing
Midwest SMBs find it harder to keep up with technology; penetration of tech product usage is slightly lower
32
48%
43%
Midwestern SMBs Other 3 Region Average
“I Find it Hard to Keep Up With the Latest Technology”
% Agree Completely/Mostly
Product and Services Used Past Year for Business
“Please indicate the extent to which you agree or disagree with each of the following statements about technology.” “Which of the following products or services have you used in the past year for your business?”
34%
35%
49%
56%
70%
75%
28%
28%
45%
50%
64%
71%
Mobile payment devices
Cloud computing/cloud-based services
Tablets
Apps
Text messaging
Smartphones
Midwestern SMBs Other 3 Region Average
33
Midwestern Summary
*Businesses with 1-999 employees (no sole proprietors)Source: Small Business Research, Q4 2015 projection
Local!
Status Quo1.63M Businesses22% (+.28% v 2014)
Good Benefits Set for Retirement
Insights2016SMB
34
NORTHEA TERN SMBs:ACHIEVERS
$
Northeastern SMBs are well-educated, affluent achievers with the highest sales of all regions
35
$203K
$1.7M
$11.5M
17.2$181K
$1.5M
$7.0M
23.5
Household Income (avg)
Net Worth (avg) Annual Sales (avg) Annual sales % Increase*
Northeastern SMBs Other 3 Region Average
Northeastern SMBs – Key Indicators
75%
69%
College Grad+
Northeastern SMBs Other 3 Region Average
*Among companies with sales increases…roughly 70% of companies across all regions
Northeastern SMBs run larger well-established, white collar businesses; they work longer hours than SMBs in other regions
36
27.8
26.026.4
23.5
Years in Operation # Employees (avg)
Northeastern SMBs Other 3 Region Average
Northeastern SMBs – Other Indicators
68% 68%
62%64%
White Collar Industries Work 50+ Hours/Week
Northeastern SMBs
SMBs in the Northeast include fewer women and minority-owned businesses; wine & gourmet food is especially popular among them
37
20%
8%
33%
15%
Women-Owned Businesses Minority-Owned Businesses
Northeastern SMBs Other 3 Region Average
7%
-5%
7%
10%
-6%
10%
-5%
6%
90%81%
49% 46% 40% 40% 36%29%
-130%-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
Difference Vs. Other 3 Regions Northeastern SMBs
Lifestyle Activities % Engage in Regularly/Occasionally
Women & Minority Ownership
“Would you describe your company as women-owned, that is, is 50% or more of your company owned by women?” “Is 50% or more of your company owned by a Hispanic, African-American, Native-American, Asian or any other members of a racial or ethnic minority group?” “How frequently do you engage in each of the activities listed below?”
32% 32%
34% 31%
14% 17%
Northeastern SMBs Other 3 Region Average
38
SMB owners in the Northeast are confident in the success of their own companies, and are showing modest expansion plans
Extremely Confident
Confident
Very Confident
80% 80%
Confidence in Own Company Success
75%
74%
79%
76%
Other 3 Region Average
Northeastern SMBs
2015
2014
Percentage Planning to Hire New Full-Time Employees in the Next Year
“What is your level of confidence in the success of your company (based on revenue, profitability & growth) over the next 24 months?” “Approximately how many full-time employees are you planning to hire over the next 12 months?”
Like all SMBs, the large majority of northeasterners generate sales locally, however, they are less reliant on local business alone
39
“Following are a series of statements that may/may not reflect how you think about business, or life in general. Please indicate whether you agree/disagree with each one, using a 0-to-10 scale.” “Let’s get a quick overview of the geographic markets your company serves. Using 100 % points, how would you break down your company’s 2014 sales among the following three categories: within your local area, the rest of the US, outside the US.”
Local Business Attitudes% Agree
62%
57%
57%
50%
First and foremost our company tries to do business with other
local companies
Marketing/selling directly to the local community is a key
component of our company's success
Northeastern SMBs Other 3 Region Average
87%
64%
32%
94%
60%
25%
Locally Nationally Internationally
Northeastern SMBs Other 3 Region Average
% Generating Sales in Each Geographic Location
Northeastern SMBs travel for business…but to a lesser extent than other regions by plane, and to a greater extent by rail
40
33%
64%
16%
30%
70%
8%
Business Travel 1+ Times/Month
Share of business trips by plane
Travel by rail
Northeastern SMBs Other 3 Region Average
Frequency and Means of Business Travel
“Approximately how often do you travel outside of your local area for business?” “What percentage of your business trips utilize airline travel?” “Which of the following products or services have you used in the past year for your business?”
Northeastern SMBs have little difficulty keeping up with technology, however, they are less avid adopters
41
Product and Services Used Past Year for Business
43%
56%
69%
74%
75%
37%
50%
63%
68%
70%
Ethernet & data networking
Apps
Laptop computer
Company website
SmartPhone
Northeastern SMBs Other 3 Region Average
“Please indicate the extent to which you agree or disagree with each of the following statements about technology.” “Which of the following products or services have you used in the past year for your business?”
59%
55%
Don't find it hard to keep up w/ technology
Northeastern SMBs Other 3 Region Average
Technology Attitudes% Agree
42
Eastern Summary
*Businesses with 1-999 employees (no sole proprietors)Source: Small Business Research, Q4 2015 projection
$11.5Mannual sales
$
43
Regional Summary
*Businesses with 1-999 employees (no sole proprietors)Source: Small Business Research, Q4 2015 projection
$11.5Mannual sales
$
+25.8%sales growth
+24.9%sales growth
‘green’&
diversityExpansion…Skills shortage concern
50%
AutonomousHighly confident
Local!
Change Agents1.79M Businesses (+.80% v 2014)
24%
Status Quo1.63M Businesses22% (+.28% v 2014)
Driven2.66M Businesses (+.44% v 2014)
35%
Good Benefits Set for Retirement
Research:
Jessie Shaw212-500-[email protected]
44
Tyler Reavis704-973-[email protected]
CONTACTS