Small Business Market Continues To Be Hot

The small business market has received significant attention from numerous companies of late as they try to expand their reach from the mature big corporate market to the expanding small business community. Everyone from credit card companies to airlines to telecommunications companies are trying to establish themselves as champions of small business. And it is no wonder - America's small businesses generated over 58,000 new jobs in May according to ADP because of their growth and the trend is expected to continue.

A new study by the Small Business Research Board (SBRB) in Canada predicts another 12 months of small business growth for Canadian SMBs. 85% of those surveyed believe the economy will remain the same or improve while 94% of the respondents predict their revenue will remain the same or increase during this period. Here are some of the major findings of the study:

How SMBs plan on growing their companies:
- 52% - grow without adding staff by improving training
- 36% - add new employees
- 5% - decrease employees
- 6% - undecided

Top 5 issues facing Canadians SMBs:
1) Taxes
2) Economic conditions
3) Finding quality employees
4) Cost of materials
5) Interest rates

Where SMBs are planning to expand:
- 22% - add more services
- 20% - expand at current locations
- 19% - enhance customer service
- 18% - add new products
- 14% - add new locations

Selling To Small Business Links for 2007-04-19

• Credit Card Companies Go After Small Business Market - Credit card companies want a bigger take of the trillions of dollars spent annually by small business owners who are reaching for checkbooks more often than they are for plastic.
  
  
• More Help for Businesses at Verizon's Small-Business Web Portal - Verizon business broadband customers will now find more features and an easier-to-navigate Web site when they log onto the Verizon Small Business Center at http://business.verizon.net/
  
  
• The Quarter of the Canadian Entrepreneur - Kudos to Roynat, which this year launched a bold initiative called "The Year of the Canadian Entrepreneur." As I understand it, their intent was to build a coalition of marketers interested in reaching small and medium-sized business, and together create events and content that would celebrate Canadian entrepreneurship and help inform and strengthen individual entrepreneurs.

Small Business Credit Card Market Heats Up

With the consumer credit card market maturing, companies are looking to small businesses to continue their growth. In fact, the fastest growing segment in the broader commercial credit card market is small business. According to marketingresearch.com, credit card companies are only
capturing 10% of small business spending - $427 billion this year and $740 billion by 2010.

How are the credit card companies going after the SMB market?

The big three, Visa, MasterCard, and American Express, have all created small business programs such as reward points, sophisticated data reporting tools, and allied merchant card points.

Discover, the new kid on the block, launched its only commercial card, the the Discover Small Business Card, last summer and is aggressively going after new business. They have increased the rewards to include cash rebates of up to 5% on office supplies, 2% on gas, and 1% on other purchases.

In response, American Expressed launched the SimplyCash business card to match the Discover Small Business Card cash back features.

Discover has also made it easier for small business owners to sign up and use their card. Other features include the ability to download the card's statements to QuickBooks; fee-free purchase checks with the same float as the credit card (for paying suppliers who do not accept cards); the ability to change the card credit limits for individual employees online in real time; and primary protection on car rentals.

In Q1 of 2007 (ending February), Discover had record transaction volume up 13% to $30.3 billion and the fifth consecutive quarter of managed receivables growth. While detailed revenue or income figures are not provided for Discover, parent company Morgan Stanley had a 70% increase in first quarter net income to a record $2.7 and cited "robust performance in corporate credit trading" as one of the reasons.

Offering a better product by listening to their customers and making it easy for small businesses to sign up and use their credit cards has proven so far to be a winning combination for Discover.

Have Credit Card Financing Options

Managing cash flow and securing startup and growth funds are among the biggest challenges a small business owner faces in building a successful company. To help finance their development, entrepreneurs are increasingly turning to their last resort: credit cards.

According to the Small Business Association, the number of small businesses carrying debt increased by 25% from June 2004 to June 2005. Over that period the number of businesses carrying under $100,000 in debt increased from 15.2 million to 19 million. A full 70% of that increase can be attributed to credit cards.

The study also found that the total dollar amount increase was only 1.9% suggesting that the developing trend is a larger number of small businesses spending on small dollar amounts as supposed to existing small businesses increasing their spending amounts.

Even though the small business lending as a whole has been slowing down, Chad Moutray, chief economist for the SBA's Office of Advocacy feels that the "small business credit card market continues to be quite dynamic."

Does your company offer small businesses the option to finance their purchases by credit card and over a period of time? If not, you could be missing out on a rapidly growing trend that can help drive significant sales.