The Small Business Landscape [Infographic]
by Nelson James, September 18th with 3 comments
It’s a tough landscape out there for small business owners. They’ve got a whole host of challenges to overcome and some many tasks to do that it might seem as if they’ll never get the opportunity for a full night’s sleep again. It’s not all bad news, though.
When it comes to money, small business owners have some struggles, but they also have tools to help them figure out the finances. It’s difficult to manage cash flow where your clients aren’t paying their invoices promptly. On the other hand, keeping tabs on the bank account is much easier with online banking—a tool that more than 70 percent of small business owners use.
Entrepreneurs have lots of options when it comes to financial advice. While most seek the advice of an accountant or financial advisor, many network with other small business owners for help. The Internet provides a fast way to get a lot of information, too—42 percent of small business owners get online for financial advice.
Small businesses are looking forward to hiring—31 percent stated they’d be interviewing candidates during the next 12 months. Finding good people is a challenge, though. The number one concern of small business owners is finding employees who have the skills they need to do the job.
Training new people is not cheap. Costs average over $1,000 and it takes at least 40 hours to properly train an employee. And not all those employees are stellar. Some report stealing, cheating, and using or selling drugs.
When it comes to marketing, small business owners are ready to ramp it up—a full 47 percent will increase their marketing budget over the next 12 months. How should they spend their money? Studies suggest that they should add more signage, such as custom banners and yard signs—64 percent of customers reported that they couldn’t find a business due to its unclear or small signage.
While there are plenty of pitfalls and challenges on the small business landscape, owners will also find plenty of opportunity.
The Small Business Landscape: Pitfalls, Plans, & Perspectives
Small businesses make up 80% of the total number of businesses in the U.S. today. And for their owners, today’s economic environment presents a unique set of challenges and opportunities to build their business. Here we explore some of the pitfalls, plans and perspectives of current business owners to get an idea of how they succeed.
When asked their biggest challenge in managing cash flow, small business owners cited: 26% low profits and lack of business, 45% not getting paid on time by clients and customers, 9% not getting out invoices in a timely fashion.
Getting Paid: 72% of small business owners use online banking to help keep them organized. 40% make direct payments to help manage cash flow.
Where do you go for Financial Advice? 74% An accountant/bookkeeper, 68% A financial advisor, 65% Other small business owners, 58% Family/friends, 49% A banker, 42% Online, 42% A lawyer, 29% Nationally-recognized expert, and 26% Local non-profit or government organization such as the SBA.
Getting financial advice: 73% of small business owners say they need occasional financial advice or support.
Getting and Using Credit: 78% of small business owners who applied for a business loan during the last two years were approved. If you applied for a business loan within the last two or more years, were you approved? 78% Yes, 18% No, and 4% Don’t know.
72% of small business owners look to their bankers for advice about the benefits of an SBA loan or how to manage payroll.
Which of the above best describes how you use/manage your line of credit? 50% I have it, but I only use it in an emergency, 23% I am trying to pay down my balance so I have a portion available to use, 19% It is the primary source of cash flow for my business, 7% It is maxed out, and 1% Don’t know.
Choosing a Bank – Most Important Factors:
- 20% Convenient Location
- 18% Relationship Rewards
- 17% Access to Local Expertise
Hiring: 31% of small businesses plan to hire new employees within the next 12 months.
Training: Average training expenditures per learner $1,041, Average hours of training per employee 40.1 hours.
What is the number one challenge you face as you look to retain top talent?
22% Finding employees with the skills required for your business, 19% providing competition salaries, 19% finding employees with a good work ethic, 18% providing competitive health care and retirement benefits, and 12% providing the extra pers of larger companies, such as a bonus, flexible hours, and child care.
Benefits: 56% of small business owners polled offer a financial benefits package. 31% offer a 401(K) plan.
Risky Employees – A 2011 survey conducted by Hayes International showed that:
I have frequently associated with fellow employees who admitted they were stealing merchandise from the company. High Risk 18.4%/Low Risk 5.4%
I am not an honest person and might steal or cheat. High Risk 9.3%/Low Risk 1.7%
I could be tempted to steal from my employer. High Risk 26.7%/Low Risk 7.8%
I might help friends steal from my company. High Risk 14.6%/Low Risk 1.3%
I have stolen money within the past 3 years. High Risk 17.5%/Low Risk 5.2%
I have stolen merchandise within the past 3 years. High Risk 15.9%/Low Risk 4.5%
I would possibly use marijuana/illegal drugs in the future. High Risk 23.1%/Low Risk 6.5%
I have previously sold marijuana or other illegal drugs. High Risk 4.3%/Low Risk 0.9%
47% of business owners surveyed reported that they plan to amp up their marketing efforts over the next 12 months.
Effective Marketing Techniques – How effective do you find these techniques in marketing your business? Word of mouth and customer referrals 84%, Networking with other small business owners 55%, Direct mail or e-mail 46%, Advertising – print, broadcast, radio, etc. 43%, and Social media 42%.
Website and Traffic – Consumers find local businesses through: search engines 38%, specialty websites 17%, and social media 3%. Social Media: 75% of small businesses report that they plan to increase social media marketing over the next 12 months.
Signage: 64% of customers report that they have failed to find a store due to small or unclear signage. % of women who have driven by or failed to find a business due to small or unclear signage:
Ages 18-24: 55%, Ages 25-34: 52%, Ages 35-49: 42%, Ages 50-64: 46%, Age 65+: 50%
100,000 Shoppers Can’t Be Wrong: Signage Communication Evidence from The Brand Spark/Better Homes and Gardens American Shopper Survey. James Kellaris, Ph.D. University of Cincinnati. The National Signage Research & Education Conference 2001.
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The Benefits of Signage [Infographic]
by Nelson James, March 27th with 2 comments
Signage is simply the best, most effective form of advertising for your marketing dollar. Here are a few more statistics about the benefits of signs.
Signage is so ingrained in our collective minds that most of the time we go about our daily activities without even knowing they are there. They direct us, remind us and sometimes even inspire us to make decisions each day. For local small businesses, they are a priceless way to establish an identity and gain new customers.
Signs attract new customers and alert them that you exist. Recent surveys found that many customers would have never found a business unless they had seen its sign.
Signs help your business be more profitable. Installing a new sign, banner or yard sign, can increase business as much as nearly 16 percent. It’s a fast, easy way to plump up your bottom line without spending a bunch of money.
Small business signs are a vital part of the community. Many new people move into your neighborhood every year—your sign encourages them to drop by your business. Over 85 percent of your customers are neighbors—they live or work within 5 miles of your business. Your customers drive past your business daily; your signage keeps you top-of-mind. Studies show that consumers are more likely to remember your business from your signage than they are from television or radio ads.
Your signage draws people in on impulse. One survey showed that up to 45 percent of people reported stopping at a business on impulse last year. You’re already making money from customers who have planned to shop at your store—why not entice a few in on impulse? You’ll gain a new customer and they’ll gain a great new place to shop.
The Benefits of Signs
Signs bring in new customers – The question was asked: How did you learn about us? The responses were: 50% On-Premise Sign, 33% Word of Mouth, 9% Newspaper, 6% Yellow Pages, 1% TV, and 1% Radio. Signs attract half of a start-up business’ new customers, 35% of passersby wouldn’t know your business was there without a sign.
Signs Increase Profits
Studies show that adding or changing a sign directly improves sales revenue. Here are the average increases in sales revenue for the Fast Food Industry: If you add one monument sign 9.3% increase and if you add a large pole sign (144 sq. ft.) 15.6% increase. And for the Retail Industry: If you add a large pole sign (144 sq. ft.) 8.6% increase, if you add a chain identity to the plaza identity sign 7.7% increase, if you add two new directional signs 8.9% increase, if you replace storefront wall sign with larger sign 7.7%.
What can signage do for you?
Research indicates that 85% of your customers live or work within a five-mile radius of your business. 17% of Best Buy’s walk in customers did so because of a sign.
Percent of Customers That Stop on Impulse:
- Larger than 400,000 sq. ft. 20% on impulse
- 100,000 – 400,000 sq. ft. 25% on impulse
- Smaller than 100,000 sq. ft. 35% on impulse
Convenience Market 40% on impulse
Discount Club/Warehouse Store 20% on impulse
Fast Food Restaurant 40% on impulse
Sit Down Restaurant 15% on impulse
Service Station 45% on impulse
Supermarket 20% on impulse
Relocation = New Customers
13% to 20% of the population moves each year, which means you have 13% to 20% new customers to attract each year through signage.
How customers know about local businesses: 35% saw it while passing, 29% always knew, 14% word of mouth, 10% advertising, 6% all other, and 7% don’t know.
Signs Compared to TV & Newspapers
Billboard – A single on-site sign costs $.02 per one-thousand views
Newspaper – A 300 line newspaper ad costs $2.81 per one-thousand views and might only reach 53% of the market
TV – A single TV ad costs $9.82 per one-thousand views and might only reach 14% of the market
One Billboard – The value of on-site signage is equal to 24 full-page newspaper ads every year.
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