Small Business is Big Business

How Selling to the Little Guy is Netting Large Profits

They may be small, but what they lack in size they make up for in number. According to the American Small Business Administration, small businesses and entrepreneurs account for 99.9 percent of the over 25.8 million businesses in the United States. Similarly, over the past ten years, small businesses have created between 60 and 80 percent of new jobs in the country. That is why an increasing number of corporate giants, such as Microsoft and IBM are beginning to recognize the value in marketing to their smaller counterparts.

In 2003, AMI-Partners reported that U.S. small business owners spent just over $10 billion on off-the-shelf software. It also estimated that by 2008, that figure would reach roughly $16.4 billion. As a result, Microsoft and its competitors started a campaign to saturate the market. And, this increasing interest in the small business market is not limited to the software industry. Indeed, from technology to insurance, larger companies are looking to the little guys to turn their next profit.

While small businesses may represent a wealth of opportunities, they also pose a number of unique challenges, the first of which is finding them. According to a recent study by Small Business Trends, 83 percent of vendors attract their small business customers through referrals – twice the number that uses other methods such as direct mail and cold calling. In the online world, 73 percent of vendors attract their small business customers through search engine results.

Small business owners are considered by many to be the world's toughest market. “Entrepreneurs are a busy breed,” says Carmichael. “With a company's entire operation often resting on the shoulders of one or two people, entrepreneurs have very limited time and resources. What they want are real solutions to their problems.”

“They need to be approached in a respectful way, with marketing that helps educate them instead of talk down to or try to trick them. Keep it simple but keep it smart.”

According to GW Equity, 35 percent of entrepreneurs who have been approached to sell their business in the past year declined because they anticipated continued growth. Similarly, MasterCard International found that 60 percent of small business owners think the outlook of their business in the coming year is optimistic.

“Entrepreneurs are passionate people who are devoted to their company and willing to do whatever it takes to make it succeed,” says Carmichael. “As a marketer, if you can show entrepreneurs how you will help make their dreams come true, you could be on your way to reaping the shared benefits.”