The 12th annual Small Business Saturday takes place this year on November 27, 2021 (the Saturday after Thanksgiving). American Express created the event as a counterpart to promotions supporting big-box retailers (Black Friday) and  Cyber Monday which encourage shoppers to buy products through big box retail stores and mega-online e-commerce channels. While local holiday events that promote holiday shopping have been around for decades, Small Business Saturday helped turn the day into a national marketing event that reminds consumers why it is important to support small and local businesses, products, and services.

According to the U.S Chamber of Commerce, shoppers have also been eager to jump on board and support their local small businesses. Last year, the U.S. Small Business Administration reported Americans spent nearly $20 billion on Small Business Saturday, and in the years before that, consumers spent a cumulative $100 billion-plus related to the event.

Small business owners and their customers understand the importance of supporting small and local businesses

56% | Percentage of small business owners who agree that customer support is more critical than ever. (1)

78% | Percentage of owners who say holiday sales will impact their ability to keep their doors open in 2022. (1)

“The past year has presented unique challenges for small business owners across the country. It has never been more vital to support the small businesses that make our communities unique and contribute to the culture of our neighborhoods. Small Business Saturday provides us with an opportunity to connect with our local community and remind them to get out and shop small all holiday season.”

Nicole and Michael Nicholas owners of Aunts et Uncles in Brooklyn, NY

Advice from shoppers on ways small businesses can encourage seasonal shopping

A recent survey of holiday shoppers commissioned by Union Bank revealed the hurdles consumers say they are facing this holiday shopping season. (2)

When asked what would make the consumers more likely to shop at a small business this year, here are some of the responses.

64% | Offer holiday sales
59% | Offer unique, exclusive gifts
49% | Provide free local delivery’
48% | Offer online ordering
47% | Offer price breaks
46% | Provide a cheery, holiday experience

“Purchasing locally handcrafted items or the gift of an experience, such as a concert, can be more personal and more fun,” Deborah Small, professor of marketing and psychology at Wharton Business School recently told ConsumerReports.org. “By choosing something handcrafted or locally grown, or making a purchase that helps support a neighborhood business, your gift will be more personal and authentic,” she said.

See SmallBusiness.com posts throughout the years.

”Photos:
Nicole Nicholas, Aunts et Uncles, Brooklyn, NY via American Express
Gettyimages.com

Sources

(1) The American Express Shop Small Impact Study consisted of two studies conducted by Teneo on behalf of American Express. The consumer survey was an anonymous online survey conducted from October 13-18, 2021 among a sample of 1,013 adults 18 years of age and older. The American Express Shop Small Impact Study consisted of two studies conducted by Teneo on behalf of American Express. The consumer survey was an anonymous online survey conducted from October 13-18, 2021 among a sample of 1,013 adults 18 years of age and older. Consumer data is weighted by five variables: age, sex, geographic region, race and education to ensure reliable and accurate representation of the total U.S. population, 18 years of age and older based on U.S. Census data. The small business owner survey was conducted online among a sample of 523 small business owners/managers in the U.S. from October 12-19, 2021. Respondent companies must conduct sales in a physical location in one of the following industries: arts/entertainment/recreation, retail trade, restaurant/bar/coffee shop/hotel/hospitality, or personal services.

(2) Union Bank Small Business Holiday Spending 2021 Survey: Research was gathered through an online survey commissioned by Union Bank and conducted by global independent research firm Edelman DxI. The survey was completed by 1,000 U.S. consumers (age 18+) and 200 U.S. small business owners, sampled to be nationally representative. Data was collected between Oct. 5 and Oct. 13, 2021. The margin of error is +/- 2 percentage points.

According to PayPal, PayPal Zettle, small businesses will have an integrated solution that enables them to accept a range of payments in-person with the Zettle card reader, helps them start selling online, and also helps them manage sales, inventory, reporting, and payments across channels, all in one place. PayPal Zettle will also enable businesses to leverage PayPal’s suite of payment and commerce solutions – from invoicing to PayPal’s Business Debit Mastercard. 

Partnering with PayPal for both in-person and online commerce, small businesses can offer their customers increased payment options, including credit and debit cards, PayPal and Venmo QR Codes, popular digital wallets and access to PayPal’s business lending solutions. All in-person and online sales can be easily viewed and managed through a business’s PayPal business account, and businesses will have access to their funds typically within one day. 

PayPal Zettle also offers interoperability through PayPal’s vast partner network, so businesses can easily link their PayPal Zettle accounts with their preferred e-commerce, accounting, and point-of-sale partners. PayPal Zettle is already integrated with a range of partners including BigCommerce, Lightspeed, QuickBooks Online and SalesVu, and will be integrating with additional partners in the coming weeks and months.  

“Consumers want seamless and integrated digital experiences no matter where they shop. As a result, small businesses need access to omnichannel payment and commerce tools to help them effectively compete and meet their customers wherever they are – in-person, online, and in-between,” said “We believe in the power of small businesses, and we will leverage PayPal Zettle to better serve in-person businesses and enable them to go digital seamlessly.” 

Jim Magats, SVP, Omni Payments, PayPal

PayPal Zettle is available to small businesses across the U.S. beginning today. Businesses can purchase their first PayPal Zettle card reader for $29, with additional readers available for $79. The transaction rate in the U.S. for card processing is 2.29% + $0.09 cents* at launch, and PayPal and Venmo QR Code transactions will be 1.9% + $0.10 cents* via PayPal Zettle.

*Fees are subject to change. 

Currently, the web-based service includes these features

• Eligible businesses can bind policies online using Nationwide’s Commercial Digital Direct tool in states where the product is currently available.
• Businesses with more complex risks are direct the user to a Nationwide agent who will have business information from the previous step.
• If Nationwide is unable to offer a product that meets the business owners’ needs, the tool offers coverage across five products with other carriers. (The company plans to add additional carrier products in the future.)

The Commercial Digital Direct platform, which enables eligible businesses to quote and bind entirely online though the commercial digital storefront, is available in 13 states (now 16) with plans to grow that number in 2019 and 2020.

On July 23, 2019, the U.S. Small Business Administration issued an “interim final rule” that will adjust industry-specific monetary-based size standards by nearly 8.4% to reflect the inflation that has occurred since the last adjustment for inflation in 2014.

According to the SBA, this will allow more small businesses to become eligible for the SBA’s loan and contracting programs. The SBA is also adjusting the revenue-based size standards for agricultural industries.

These adjusted size standards will become effective on Aug. 19, 2019, and will be reviewed again as part of the second five-year review of size standards mandated by the Small Business Jobs Act of 2010.

The SBA is also adjusting program-specific monetary-based size standards by the same amount for sales or leases of government property and stockpile purchases.

90,000 | The SBA estimates that 90,000 new businesses will gain small business status under the adjusted size standards (becoming eligible for SBA loan and contracting programs).

$750 million|The SBA projects the change will result in an increase of $750 million in federal contracts awarded to small businesses

Highlights of the interim final rule that adjusts monetary small business size standards for inflation

8.37% |(Increases by) 8.37% all receipts-based size standards (except for agricultural industry size standards) for inflation that has occurred since the last inflation adjustment in 2014

8.37% | (Increases by) 8.37% all asset-based size standards for inflation that have occurred since the last inflation adjustment in 2014

40.26% | (Increases by) 40.36% the receipts-based size standards for agricultural industries for inflation that has occurred since the agricultural industry size standards were set by statute in 2000

8.37% | (Increases by) 8.37% the program-based size standards for “Sales or leases of government property” and “Stockpile purchases” for inflation that has occurred since the last inflation adjustment in 2014

More on SmallBusiness.com

For more information about small business “size,” download this white paper (PDF) that explains how the SBA establishes, reviews, and modifies its small business size standards.

GettyImages

Mastercard announced Friday (June 12, 2019) that it is expanding globally its partnership with the business software company, Zoho. According to Mastercard’s media release, the partnership will enable small business owners to have access to Zoho’s comprehensive array to software products and services. The Mastercard, Zoho partnership will provide global access to a business-solution suite of 40+ integrated business and productivity applications.

“We are excited to partner with Mastercard, a company committed to empowering small business owners across the globe. said Sridhar Vembu, CEO of Zoho Corporation. “This partnership connects small businesses to the innovative applications that enable them to access, manage and analyze real-time information that are critical to their success.”

“Mastercard and Zoho together are able to pair our smart solutions and scale them to address some of the challenges small businesses owners face every day,” said Zahir Khoja, executive vice president, Global Acceptance at Mastercard. “(Small business drives) job creation, productivity and growth globally; it’s critical that we find partners and develop solutions that allow us to help small businesses succeed.”

According to Khoja, small businesses will now have access to various solutions such as resource planning and finance software, customer relationship management marketing solutions, and more.

Here are some survey highlights of current and aspiring Baby Boomer small business owners from the national survey.

Definition of Baby Boomers

Baby boomers are those people born immediately after World War II, between 1946 and 1964 — the time frame most commonly used to define them. The first baby boomers reached the typical retirement age of 65 in 2011.

8 | With ten being the happiest, Baby Boomers rate their small business happiness at 8.

The top three small business categories for Baby Boomers

• Business Services
• Food and Restaurant
• Health, Beauty, and Fitness

Survey highlights of Baby Boomer-owned small businesses

69%| Percentage of Baby Boomer businesses that employ two or more employees.
73% | Percentage who want to grow their current business
19% | Percentage who want to open an additional location
8% | Percentage who want to sell their business
32% | Percentage who indicated their most popular form of small business financing is cash

For over 25 years, many of the clients I’ve been fortunate to work with have been marketers at large organizations that sell products and services to small businesses. These marketers have been talented, innovative and smart. Ironically, however, almost none of them have ever run, or even worked at, a small business. Time after time, my colleagues and I have seen how easy it is for these smart marketers to fall into the trap of thinking their small business decision-making customers run something that’s like a big business (an “enterprise”), just smaller. In reality, the people who make buying decisions for small businesses live on another planet in a galaxy far, far away from what the marketers envision.

Big businesses have an operational mindset

A major difference is experiencing a reality of what it takes to get things done at a big corporation: organization and structure. For necessary reasons, large companies are organized in a hierarchy and order based on what I describe as an “operational taxonomy” (borrowing the word “taxonomy” from the approach scientists use to map out classifications and connections). Such a taxonomy enables workers with specialized skills and responsibilities to understand where they fit into an organization by department (finance, marketing, IT, production, etc.), rank (assistant to the regional manager vs. assistant regional manager) or mysterious function (fixer, closer, rainmaker). The operational taxonomy of operations is so dominant among large corporations, it has become the way in which business schools organize academically. A person who has an MBA with a marketing focus has become an expert not only at marketing, but where marketing fits into the operations of a company.

Small businesses have a situational mindset

In a small business, people typically have multiple responsibilities and little perception of operational boundaries. (“Hey, can you help me move this table?” the intern asks the owner.) The flexible structure (translation: structure that looks like chaos) gives rise to what I call a “situational taxonomy.” Small businesses often don’t know, nor care, whether a problem is financial or operational, marketing- or technology-based. They simply know they have a problem that needs a solution. And the solution needs to appear now.

What this means if you sell products or services to small businesses

Except for skills and knowledge related to their industry or market niche they serve, a small business owner is typically a generalist when it comes to business operations. Often, we don’t always know what we don’t know.

Unless your product or service is tied to a specific profession or industry, when you describe it to a small business customer, don’t use the language of a big business (or “enterprise”). Don’t talk about features or use acronyms or technical specifications. Talk about the situation a small business owner is likely facing when they are looking for your product. Talk about how your product or service addresses the situation.

Here’s what it’s like when you are a small business owner who wants to buy your product

Imagine yourself at a hardware store asking a clerk if they have one of those thingamajigs that goes with a whatchamacallit. That’s what it’s often like when a small business customer needs your product. We just don’t know the name of your product, or even the category of product you may consider it.

A small business owner or manager wears many hats throughout the day. If you can find a way to help a small business customer understand how your product or service can enable them to wear one less hat, you’ll have a better chance of generating sales and starting a long-term relationship.

(Note: A version of this article by Rex Hammock, founder of SmallBusiness.com, first appeared in Idea-Email, the “un-newsletter” of Hammock Inc., the direct-to-customer media and content company and host of SmallBusiness.com.)

]]> https://smallbusiness.com/selling-to-small-business/what-is-an-smb/ Thu, 20 Sep 2018 17:30:23 +0000 http://smallbusiness.com/?p=8242 (Originally Shared on SmallBusiness.com on April 14, 2014. We can’t say this enough.)

As within any tribe of professionals, it’s normal for those who market products and services to small businesses to develop an inside language of buzz-terms and acronyms as shortcuts for long strings of words or common concepts. As business-to-business marketers can’t do what consumer marketers do when they describe customers as a set of demographics (women, ages 18-21, for example), marketing strategies for reaching small business decision makers tend to describe the customer by the size of a company (revenues or employees), the industry “vertical,” or other factors like location. For that reason, the proxies for consumer-like demographics have evolved into terms like:

• Microbusiness
• Small office/home office (SOHO)
• Small and mid-sized (or medium-sized) business (SMB)
• Small and medium enterprise (SME)

As marketing strategy terms, those labels may make sense. However, if you are not a marketer to small business, but an actual small business, there’s a big possibility that you have no idea what any of those terms actually mean. And even if you did, you’d likely prefer to be described as a small business, anyway.

When strategy words escape the marketing department.

Often by accident, the inside-baseball marketing terms that we use while developing and managing a marketing strategy become so much a part of a marketer’s vocabulary, the terms start creeping into conversations with people who, by the blank looks on their faces,  have no idea what we’re talking about. Strangely, that doesn’t stop us from using them. We even start naming products and services with acronyms no one in the target audience ever use (see graphic below).

The problem with using “strategy labels” like SMB or microbusiness when communicating with customers.

Even though it is quite normal to talk in the marketing department with the language of demographics and target markets, if you were a consumer marketer, I doubt you’d ever approve the slogan, “This Bud’s for Males, 21-34.” But that’s exactly what you do when you brand something the “SMB Solution Center.”

When marketing to small business owners and managers, use the labels they use.

Next time you talk with one, listen to how a small business owner or manager describes himself or herself and you’ll never hear an acronym used in their description (unless they are a CPA, or perhaps, an ENT). They’ll self-identify using phrases like, “I run a business” or “I have a bike shop” or “I’m an electrician.” They will use terms like small business or family business or independent business to differentiate their companies from certain types of businesses they know have negative connotations among customers (as I’ll note shortly). Rarely do the people who own and run small businesses, even fast-growing ones, call themselves an entrepreneur. However, in recent years, they’ve stopped correcting others who say they are. While they may admire entrepreneurs, most small business owners  think the term refers to someone else.

In three decades of marketing products and services to small business owners, I have never once heard a small business owner or manager describe himself or herself or their companies using any of the following terms: microbusiness, SOHO, mid-sized or SMB.

Small Business owners and managers want their companies to be called a small business because they view it as a competitive advantage

(Click to enlarge image.)

(Source: Pew Research via USA Today, 4/23/2010)

The findings of a 2010 study by Pew Research may shed some light on why a business of any size would like to be identified  as a small business. According to the Pew study, Americans trust the institution of “small business” even more than they trust religious organizations and universities.

(Click to enlarge.)

(Source: Gallup, Surveyed: June 1-4, 2013)

In similar research conducted by the Gallup organization last year, “the institution of  small business” ranked #2 when the U.S. military was added to the list. Still, the findings show there’s plenty of goodwill in the marketplace for small businesses. To be a “small business” is to be trusted. To be something else is to be less trusted. 

The term “small business” has statutory definitions that benefit a wide variety of businesses, and that are baked into thousands of state and federal laws, regulations and administrative codes.

Another reason a small business (or, even a mid-sized one) wants to be called a small business is quite practical and bottomline oriented. The term “small business” appears 996 times in the U.S. Code, the massive collection of all U.S. laws. Here’s how many times the following terms appear in the code: Mid-sized business:  0;  SMB: 0, Microbusiness: 0. Unlike the marketing-department strategy terms “mid-sized” “SMB” or “microbusiness,” the definition of  small business has been standardized and codified by the U.S. government (and like other government creations, it’s quite complex). Nearly all federal legislation appropriating government funds includes language requiring part of those funds be spent with companies designated (and defined) in the law as a “small business.” For an example, visit this Small Business Set Aside FAQ on the website of the U.S. General Services Administration. Knowing precisely what a small business is can keep a company from being subjected to certain regulations or taxes. Because such things as SBA loans and government contracts hinge on a very precise understanding of what the term”small business” legally means, those who run small businesses don’t devote any time wondering if they fall within the parameters of measurements dreamed up by marketers. Being what the government defines as a small business is more important to them than, say, the desire of Walmart’s Sams Club to redefine a huge segment of small businesses as “microbusinesses.”

Multiply the following by 50 states: The House Committee on Small Business, The Senate Committee on Small Business and Entrepreneurship, The Small Business Administration.

(Illustration: SmallBusiness.com, photo: Google Maps Street View)

As noted in the previous point, the process of codifying the term “small business” has taken place over a period of six decades. Each state and territory uses the term “small business” for agencies, committees and programs. The term small business is actually  written in stone on the front of an office building in Washington, DC. (see graphic). From a lobbying standpoint, any strategy that appears to break up the trusted institution of  “small business” into smaller segments called “micros” and “mid-sized” would appear to be a divide-and-conquer strategy that could negatively impact the ability of small businesses to have a unified message.

Small Business Saturday

Five years ago, when American Express chose to put its marketing muscle behind the idea of supporting a “Small Business Saturday,” they closed the door on those who might want it to be called Microbusiness Saturday or Small and Mid-sized Business Saturday. In other words, tens of millions of dollars have gone into a campaign that encourages small businesses, of any size, to call themselves a small business on the Saturday after Thanksgiving.

And finally: No one has ever said the following sentence, ‘My goal in life is to one day start and run an SMB.’

(Photo: Joshua Ommen via Flickr)

Again, there is nothing wrong with using any acronym you want when discussing marketing strategy behind closed doors. But when you start using terms like SMB, those who don’t know what SMB might mean will do what we all do: Google it. And they’ll be even more perplexed when they discover that the first several links on the Google search results page will explain to the small business owner that an SMB is a “‘Server Message Block’ that operates as an application-layer network protocol mainly used for providing shared access to files, printers, serial ports, and miscellaneous communications between nodes on a network.”

Of course, if you aren’t a networking engineer, after reading that, you’d still have no idea what an SMB is.

So now you know what it feels like when you call a small business an SMB.

While American’s overall trust in national institutions has fallen to historically low levels, three of the 15 institutions tested annually in the Gallup confidence study remain at their long-held positions atop the list: (1) The Military, (2) Small Business, and (3) Police.

Highlights of the  “Gallup American “Confidence in U.S. Institutions, 2018” 

• Americans’ average confidence in the nation’s major governmental, economic and societal institutions has leveled off at a historical low point.
• Not only are the military, small business, and police, the most trust institutions, they are the only three institutions that receive higher confidence ratings from a majority of Americans.
• The 12 other institutions are trusted by less than 50% of Americans.
• If you’re looking for some positive metric in the annual research, here’s one: Compared to previous years, the distrust of American institutions didn’t get worse.

GettyImage | USS Constellation returns home from Persian Gulf area, 2003.

Percentage of Americans who trust the following institutions either “a great deal” or “quite a lot.”

*Trusted by a majority of Americans

Source | Gallup “Americans’ Confidence in U.S. Institutions, 2018”, June 1-13, 2018

According to a new survey of 300 small business owners commissioned by Salesforce and conducted by Harris Poll, 35 percent of those surveyed said not having enough time was the problem keeping them up at night. Yet a surprisingly high number of those surveyed are not using business productivity tools and services that could save them time. Here are more findings published in the 2016 Connected Small Business Report based on surveys conducted Nov. 17–28, 2016.

According to the report, most small business owners still rely on manual, outdated processes, such as email and spreadsheets, to store and track their customer information.

What percent of a small business’ annual budget goes toward technology?

| 63% | Owners who say 1–24 percent of total annual budget
| 10% | 25–49 percent
| 3% | 50–74 percent
| 2% | 75–100 percent
| 21% | Not sure

Average (Mean) | 15 percent

Where does the technology budget of a small business go?

| 46% | Hardware (e.g., services, laptops, etc.)
| 33% | Financial software (e.g., accounting / bookkeeping, bill payment)
| 26% | Productivity software (e.g., Microsoft Office, etc.)
| 22% | Internet hosting / ISP
| 21% | Security systems (e.g., firewall, intrusion detection)
| 20% | Point of sale / point of purchase software
| 16% | Mobility / mobile solutions
| 15% | Telecommunications / VoIP
| 10% | Customer relationship management (CRM) software
| 9% | Technology services
| 3% | Enterprise resource planning (ERP) software
| 10% | Customer relationship management (CRM) software

How many business apps or technology systems (e.g., QuickBooks, Slack, Microsoft Office, CRM) does a small business use?

| 20% | 1 app or tech system
| 21% | 2
| 18% | 3
| 7% | 4
| 16% | 5 or more
| 18% | None

How small businesses track their relationship with customers

| 44% | Email tools (e.g., Outlook, Apple, Gmail contacts)
| 41% | Spreadsheets (e.g., Excel, Google Sheets)
| 34% | Written customer ledger
| 20% | Customer relationship management (CRM) app or system (on your computer)
| 29% | Basic database (e.g., Access, Quickbase)
| 15% | Other paper based system
| 12% | Customer relationship management (CRM) app or system (cloud-based)
| 5% | Other

How small businesses are marketing to their customers

| 51% | Social media marketing (e.g., Facebook ads, YouTube ads)
| 37% | Email marketing
| 34% | Print advertising
| 23% | Direct mail advertising
| 21% | Digital advertising
| 20% | Search engine optimization (e.g., Google Adwords, Bing)
| 15% | 1-to-1 marketing journeys
| 9% | Customer relationship management (CRM) app or system (cloud-based)
| 8% | Customer relationship management (CRM) app or system (on your computer)
| 7% | Marketing automation
| 11% | Other
| 5% | I do not market to my customers.
| 10% | I do not market to my customers using technology.

What business-related issues are keeping small business owners up at night?

| 35% | Not having enough time in the day
| 34% | The impact of the economy
| 31% | Having limited resources available
| 31% | Having to pay taxes
| 24% | Getting funding
| 19% | Finding the right talent
| 13% | Managing people
| 10% | Implementing the right technology systems
| 6% | Other
| 17% | Nothing keeps me up at night

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