state of the business owner key findings webinar

State of the Business Owner 2012The Planner and the Pessimist

Key Findings WebinarJune 6, 2012

333 SW Fifth Avenue, Suite 350 | Portland, OR 97204 | 800-620-0307 | www.synotac.com © Synotac Design, LLC 2012

Presented by:Cameron Madill, President and Founder, Synotac

Jonathan Raymond, CEO, EMyth

Presenters

For Guides & Additional Resourceswww.stateoftheowner.com

Cameron Madill Jonathan Raymond

President, Synotac CEO, EMyth

Webinar Questions & Comments

Twitter Hashtag: #sobo2012

Webinar questions feature

Origins and Motivation

What are the success factors helping small and midsize businesses

succeed in 2012?

People who have just run a marathon sweat a lot

You are sweating a lot

Therefore, you have just run a marathon

Faulty Logic in Business

My favorite business tactic is _____

The most successful company in the world today, Apple, uses this business tactic

Therefore, my favorite business tactic will help ANY company to grow and thrive

The Business Book Formula

There is little good research on how small and midsize businesses thrive

We Are Not Fortune 500 Companies

Boring & Important - Methodology● 802 business owners responded to a 55-question

survey in early 2012

● Respondents came from 47 different countries, with over 90% coming from six English-speaking countries: USA, Canada, UK, South Africa, Australia and NZ

The Data at a Glance● The median age was 46 with respondents ranging from

20 to 90

● Combined revenues exceeded $600 million, with the average compensation of $104,000 and revenues of 1.4 million.

● The median growth rate was 13% with expected 2012 growth of 16%

● All currency figures converted to US dollars

● Only statistically significant findings are reported

The Planner and The PessimistBusiness owners were starkly divided into two groups:

Planners Pessimists

The PlannerPlanners believe they control their destiny and are busy navigating towards their vision for the future of their business.

Qualities of a Planner● Have a coherent vision of the future● Regularly track business metrics● Have concrete plans to move

towards their business vision● Are innovative with technology

The PessimistPessimists believe the future is dictated by external events beyond their control that limit them from creating the life they want.

Qualities of a Pessimist● Do not have a vision for their

company in the future● Have few or no formal plans for

making progress towards this vision● Do not regularly consult metrics to

track business progress

So Who Cares?Businesses that were owned by Planners:

Grew faster in 2011

Had higher annual revenues

Were more optimistic about 2012

The owners took home more compensation

Which one are you?

Planners Pessimists

The Way to a Business Owner's Heart

Composite of responses to "What is your biggest opportunity in 2012?" and "What is your biggest challenge in 2012?"

What Helped Companies Grow in 2011?

The Three Keys to the Growth Engine

Fundamentals Accelerators People

KEY #1 - FUNDAMENTALS

KEY #1 FUNDAMENTALS

The Recipe for Success

We found that businesses that thrived in 2011 followed a simple formula:

Vision + Plans + Data = Success

VisionOnly 42% of all businesses had a written description of what they want their business to look like in the future.

The greater the extent of revenue planning, the more successful businesses were in 2011 and the more optimistic they were about 2012

Bowling Blind

What would happen if you had to run your business without any feedback on the results you were achieving?

Data65% track business metrics at least monthly

66% use their P&L and Balance Sheet to make decisions

43% quantify their lead generation efforts

39% monitor web traffic regularly

DataBusinesses that tracked business metrics monthly were 80% larger and earned 60% more than their peers

Businesses that use financial statements to make decisions were 45% larger and earned 60% more than their peers

What Will The Economy Do in 2012?

Optimism and Planners

Optimism and Experience

KEY #2 - ACCELERATORS

KEY #2 ACCELERATORS

AcceleratorsOnce you have the fundamentals in place, there were two primary areas we found that could be used to accelerate your progress towards your vision:

● Technology● Marketing

Technology and DisruptionWhen asked about the biggest trend affecting their business in the next three years, business owners consistently cited technology and the internet as drivers for change in their businesses, good and bad.

Technology and Disruption

“Consumers becoming increasingly web based”- 33 year old male, Australia

“Technology making the world a smaller place”- 42 year old female, Professional Services, United States“

Disintermediation due to the internet”- 49 year old male, Professional Services, South Africa

Optimism and Technology

Before A Prospect Arrives41% of businesses monitor their reputation online by observing what their customers and employees are saying

Impact of Your Reputation Online

80% - Negative information online has made me change my mind about purchasing a product or service

87% - Positive information online has reinforced my decision to purchase a product or serviceSource: MarketingPilgrim.com

What's Your Real Homepage?

Highly Effective MarketingAfter referrals, websites were the only type of marketing rated highly effective by more than half of the respondents.

Hubs and Spokes

"Marketers are increasingly viewing their websites as the hub around which all their marketing efforts revolve, rather than just another spoke."MarketingSherpa

The New Buying Process

77% of B2B buyers said they did not engage with a sales rep until after internal research was conducted, and 36% of buyers said they did not engage with a salesperson until after a preferred list of vendors was established.Source: DemandGen

Educational Marketing

Marketing and Planning

The Target

Have you defined the key characteristics of your target market?

65% - Yes35% - No

The Target

Marketing and Planners

Do you have a marketing plan that you revisit at least quarterly to evaluate results?

35% - Yes65% - No

Marketing and Planners

Digital AnalyticsBusinesses that monitor their lead generation and website analytics outperformed those that did not:

● They Grew 20% faster in 2011● They Are twice as optimistic about 2012● They Generated 30% more revenue overall● They Took home 20% more compensation

KEY #3 - PEOPLE

KEY #3 PEOPLE

PeopleThere were two major groups inside of your business that determined success:

● Your Employees● YOU (business owners)

KEY #3 - PEOPLE

Labor Mobility

Standard "quit" rate in any year: 25%In 2010: 16%Source: U.S. Bureau of Labor Statistics

KEY #3 - PEOPLE

Employee EngagementEngaged - work with passion and feel a profound connection to their company

Not Engaged - essentially “checked out” and sleepwalking through their workday

Actively Disengaged - acting out their unhappiness and undermining the mission of the companySource: Gallup

KEY #3 - PEOPLE

November 2011 Gallup Q12 Results

KEY #3 - PEOPLE

How do you Retain Star Employees?“Honesty, fair treatment, fair compensation, clear communication.”- 50 year old female, United States

“Mentoring, flex work schedule, encouraging ongoing education.”- 36 year old male, Technology Services, United States

KEY #3 - PEOPLE

How do you Retain Top Employees?Recognition

Professional Growth Opportunities

Clear Expectations

Trust and Autonomy

Fair Compensation

KEY #3 - PEOPLE

So What Are You Doing About It?

KEY #3 - PEOPLE

Results-oriented Role DescriptionsOnly 30% of all businesses had results-oriented role descriptions for all of their employees.

KEY #3 - PEOPLE

Vacation and Ownership

KEY #3 - PEOPLE

Business OwnersWe could find no relationship between growth rates and amount of vacation by the business owner.

KEY #3 - PEOPLE

Gender and Business Ownership

KEY #3 - PEOPLE

There were substantial differences in compensation and business size between male and female business owners.

The Partner FactorBusiness owners with a partner outperformed those without a partner in every area we measured.

KEY #3 - PEOPLE

The Business Model MattersBusiness owners who had a relationship-driven model took home substantially more compensation than transactional companies.

KEY #3 - PEOPLE

Which one are you?

Planners Pessimists

State of the Business Owner 2012For additional research, guides and community:

www.stateoftheowner.com

Facebook.com/StateOfTheOwner

@StateOfTheOwner

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