Strategy
The primary market of most small businesses is the public, 57 percent the general public and 14 percent a limited number of customers and/or clients from the public. Another 19 percent sell primarily to businesses and 4 percent primarily to governments and/or non-profits. The remainder have customer-bases too mixed to designate a single primary market.
Small businesses typically sell locally. Seventy-five (75) percent of small businesses have 90 percent of their customers located within a 100 mile radius.
Three of four small-business owners perceive themselves to be competing in competitive to highly competitive markets. Part of this perception may be the accompanying perception held by 29 percent of small employers that they are competing primarily in declining markets, not associated with population changes.
Thirty-six (36) percent intend to move into new geographic markets in the next five years, 46 percent into new product/service markets, and 25 percent into both.
Social media is playing a growing role in small business marketing. Thirty-two (32) percent claim to use FaceBook to promote their businesses, while 11 percent claim to use Twitter and 7 percent Groupon, Living Social, etc.
Overwhelmingly the most common generic business strategies employed by small-business owners are highest possible quality and better service.
Less common generic strategies include in order of use: lower overhead, more choices and selection, a superior location, missed or poorly served customers, unique marketing, lower prices, creation of new products/services/processes to sell or lease, new or previously unavailable goods/ services, and alliances, cooperation with another firm/firms.
The owners of younger and smaller businesses typically have the least well-defined strategies.
Small-business owners typically blend generic strategies to produce a unique strategy to fit their own circumstances. There are four blends: innovation, consisting of creation of new products/services/process for lease or sale, new or previously unavailable goods/services, and more choices and selection; a soft blend, consisting of service and quality; cost, consisting of low prices and low overhead; and alliances.
The innovation blend is associated with growth, both experienced and desired. The soft blend is associated with neither experienced nor desired growth. The other two blends have mixed ties to growth.
Small-business owners frequently change strategies. All but about one in four who were in the business three years ago have changed their strategies since the onset of the Great Recession. Seventeen (17) percent assert they changed theirs significantly in that time frame while another 11 percent changed theirs noticeably. While most of those changes could be attributed to the negative impact of the economic down-swing, 21 percent who changed theirs did so because they saw an opportunity.
Changing strategies substantially is not uncommon. Forty-one (41) percent have changed the strategy of the business they are now operating significantly or noticeably since they began.
