new study sheds light on small businesses — and how to connect.
by rick telberg
at large
just as it’s a mistake to think that all cpas are the same, no two small businesses are identical.
if you are trying to land small business owners as clients, be aware that it’s more than just entrepreneurial flair that separates this group from the rest of the american public. and even within the same industries, no two small business owners are alike.
so says one of the few detailed studies of small business owner demographics, which experian, the credit-rating agency, recently completed. for starters, the study found this is indeed a lucrative market: small business owners’ average income of $71,690 is 21 percent higher than the national average.
not surprisingly, direct mail may have a better than average success rate with business owners. this group is 20 percent more likely than the general public to be mail-order buyers, and small business owners are 50 percent more likely to purchase financial services items via mail.
the internet must be a key component of marketing to business owners. they are 54 percent more receptive to e-mail than the general population is and 30 percent more interested in using their pcs and in being online.
ranked by industry sectors, small businesses in finance, insurance and real estate are the most likely to buy via mail order, while those in transportation are the least likely. in online buying, services industry owners are the most likely candidates, while those in agriculture, forestry and fishing are the least likely. farmers, foresters and fishers are, in fact, 24 percent less likely than the general population to buy online.
if you are trying to develop a rapport with small business owners, equip yourself with knowledge of the 1960s and 1970s because odds are that your target is a baby boomer. the average age of today’s small business owner is 50.3.
the average age per industry ranges from a high of 54.1 in fire, insurance and real estate to a low of 48.3 in construction. in manufacturing, the average is 50.1.
what about family values? small business owners tend to come from traditional households — ones that are headed by a male married with children. wholesale trade, mining, construction and agriculture, forestry, fishing are the industries where more than half of the owners are married, compared to a 40 percent national average. small businesses in services, retail trade and public administration have the lowest married and traditional household rates.
you might also want to know about high-end household values. seventy-five percent of small business owners own homes valued at $500,000 or more. owners in all industries have lived in their homes for longer than the seven-year average for all americans.
they are also more likely than the general population to be involved in civic activities and to donate to charitable causes. the most civic minded are from the finance/insurance/real estate and services sectors; the least likely to donate are farmers, fishers and foresters.
there are also wide differences in the characteristics of incorporated versus non-incorporated small businesses. those with an “inc.” at the end of their business names are 97 percent more likely to have annual sales of more than $1 million and 2.62 times more likely to have sales exceeding $5 million.
incorporated business are also more likely to be start-ups, defined as being in business for two years or less, while non-incorporateds are more likely to be in business for at least three years.
so where are you going to focus your new business development efforts?