They tend to provide a large portion of the jobs in any developed market and play an important role in economic growth too.
Because of this, tracking trends in what small business owners say is hardest about running their firm is a good barometer for the overall health of the economy. And big firms who sell their products and services to smaller ones will also do well to watch this closely as it can shape what makes their most effective marketing strategy.
CEB data on these trends show that owners are have put in more effort to acquire new customers and increase sales, motivated by an optimistic economic outlook and a desire to combat increased competition from large enterprises.
In 2009, the CEB Small Business Pain Points study has identified poor sales as the biggest issue for small businesses struggling through the recession but, since 2013, as the economy improved and business returned to healthier levels, the pain of competition has eclipsed poor sales as the biggest headache (see chart 1).
Chart 1: “What is the single most important problem facing your business today?” Percentage of owners Source: CEB Research, July 2015, (n=1222 N.A.), July 2013, (n=1087 N.A.), July 2011, (n=1099 N.A.), June 2009, (n=1228 N.A).
Two Ways to Market to Small Businesses that Fear the Threat of Competition
Competing in the small business community plays out in two ways, and both have an impact on big company marketers trying to boost their sales to small businesses.
Competition for sales: Small businesses compete with both large and small businesses for customers, and often can’t match the low prices their larger counterparts can offer on products and services.
For marketers targeting the small business segment, maintaining a position as “the ally of the little guy” and demonstrating support of the small business community can go a long way towards repositioning a large company as a partner of small business, rather than a competitor.
Competition for labor: Small businesses struggle to match the lower product prices offered by enterprise competitors with access to cheaper overseas manufacturing. This creates an uneven playing field for small businesses relying on local manufacturers, and makes competition more difficult.
However, marketing and communications based on fair labor practices can help marketers present themselves in alignment with owners instead of ranged against them – in fact, CEB research on small business owner values shows that “fair and ” is one of the enterprise values owners keep in mind when evaluating a potential new supplier.