Small Business Tracking StudyWave 2: July 2015

It’s our business to know your business

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We strive to understand what

makes Small Businesses tick

To learn about their perceptions,

challenges & needs

Across day-to-day areas that make their

business run: Technology, Healthcare, Finance and Insurance

OUR GOAL: Make our marketing

work harder by getting smarter about our

audience

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Coffee Shop

We’re tracking trends to better speak with small businesses We want to know what makes them tick, what keeps them going, what is top of mind every day and every minute.

How do I stay on top of new government rules

and regulations?

How do I find new customers when there’s

so much more competition out there?

How do I keep up with new technology innovations and give my business the tools

we need to succeed?

Involved in company’s technology, health

insurance, commercial insurance and financial

decisions

Decision-makers and Influencers

Wave 2 of our study was conducted on July 10 – July 23

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504 Small businesses reached through an online survey

Small to Mid-sized businesses with 2-99

employees

We asked a series of closed- and open-ended questions to understand their primary concerns and delve deeper into Marketing, Technology/IT, Financial Services, Healthcare and General Insurance needs

What are businesses’ primary concerns?

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Small businesses tend to worry about the things we’d expect — cash flow, the economy and growth

Cash Flow30%

Economy & Regulation

19%

Retention & Growth

16%Not Worried9%

Other8%Employees

5%

Work-Life Balance5%

Business Development/ Expansion

4%

Retirement3%

Healthcare2%

What Do You Worry About the Most?

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Cash flow is the top concernNearly one-in-three report that cash flow, taxes and meeting payroll is a primary concern

“Having enough money for Pay-roll, Paying my Taxes, and growing my business.” “Cost of materials staying at a level

amount-necessary to complete projects on time and within initial cost.”

“Collecting payment for work completed.” “Making enough money to keep my

business operating which in turn gives me the money I need to pay household expense.”

“Profit and loss of course, Hospitals do not pay in a very timely way, A/P calls are a must, I call them ‘begging for $$ calls,’ I pay my bills in 30 days, I receive payment in 60 - 120 days, after 25 years I'm used to it.”

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Keeping up with changing regulations and the turbulent economy is a challengeThe economy, regulations, and keeping up with paperwork is the top concern for nearly 1-in-5

“The regulations that are increasingly impacting my clients.”

“Our community is completely dominated economically by our local Army post. Troop cutbacks could decimate our local economy.”

“Sorting through complicated paperwork, understanding insurance and tax implications of new options.”

I worry about the state of our country. At one time I was quite positive and hopeful but in the last few years I've seen a lot of negative developments in terms of partisanship and racism.

“In the Bay area, our number one concern is the soaring residential and commercial real estate prices.”

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They worry about growing their business and finding new clientsSales, new business and growth are major concerns to 16% of SMBs

“Lack of customers, how to increase sales day-to-day.”

“How to promote my business & keep it growing. Constantly watch the dollar value of services and research the competition for both ideas & for comparison.”

“Customer retention. Revenue growth.”

“Maintaining the client base, Pricing to maximize business without losing business.”

“Getting new customers. keeping up with technology that is always changing.”

“Getting new clients and keeping those interested in our services.”

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Primary concerns are often tied to seasonality — and what’s going on in the news and marketplace at the moment

Cash Flow “Summer is here, no $ being spent, so we tried to budget better, less product inventory to keep costs down.”

“There really is never a specific event. Winter is always a reason to worry. I "loan" my business a few thousand dollars every winter so we can get by.”

“The recession hit us hard because a lot of our clients had to reduce operations and that meant they had less of a need for legal services. We waited it out. It took about 6 years.”

“Financial crises cut many of our lines of credit, we sought out alternative sources at higher rates.”

Economy & Regulation“Dodd Frank has made it almost impossible to borrow.”

“Health care mandated changes. Reviewed many different options.”

“The Affordable Care Act has affected what insurance companies are compatible with us.”

“The passage of Obamacare has added a huge expense to employee benefits. We are trying to maintain great health insurance for example but it is becoming very costly.”

Growth & Retention“A really big business purchase, had to cut down to a minimum even at home to keep up with some expenses, clothes and stuff.”

“New technology initial costs are my biggest concern but pay for themselves quickly, within a few months.”

“Downturn in economy. Closed office. Moved company to home based virtual offices. Dramatically reduced overhead.”

“We lost a major client last year. We increased our marketing efforts to increase this work. It took about 6 to 8 months to get back on track.”

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Other MentionsNot Worried (9%)“Really....nothing. Sales have steadily increased over the past 10 years with nominal marketing effort. And now that we will be becoming more aggressive in that area, things are looking even better.”

"Don't worry - be happy" We have applied this to our business activities as well as our personal lives.

“I do not have too many worries. We have been in business for 37 years and had to deal with it all at one time or another. Been there done that.”

Employee Talent (5%)“Quality employees. Keeping high quality work.”

“Maintaining quality, employee turnover, new customers, remaining fresh.”

Family/Work-Life Balance (5%)“I worry about my family. that I will not make enough to provide for them. That’s my biggest concern and priority.”

“Balancing home-work life and meeting the needs of my growing family while serving my employees and clients well.”

Retirement (3%)“Having enough money to some day retire.”

Personal Health Concerns (2%)“My health. I seem to have something going wrong all the time.”

Business Development & Expansion (4%)“It's hard to find the time to reach out to clients we don't have yet.”

“I am constantly analyzing how we can scale our business and grow into new markets daily, monthly and yearly. That is my biggest pressing issue.”

What are their financial concerns?

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The financial outlook is mostly positive — with the majority of smaller companies anticipating growth or no change

Growth No change Contract Not sure

61%

23%

8% 7%

What is your financial outlook?

2-4 emp 5-19 20-49 50-99

52% 60% 82% 70%

2-4 emp 5-19 20-49 50-99

30% 23% 12% 12%

82% of companies with 2-4 employees, and 83% of companies with 5-19 employees expect positive or neutral growth.

Only 8% of all companies have a negative financial outlook.

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Concerns about financial expenses are generally spread out across the year

< 50 employees 50-99 employees

Spring 9% 10%

Summer 17% 40%Fall 7% 15%Winter 24% 35%

My expense aren’t seasonal 55% 35%

What time(s) of year are expense a primary concern?

55% of smaller SMBs don’t have seasonal expense

Larger SMBs tend to experience expense concerns in the summer

How do they market themselves and find new customers?

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All businesses promote themselves in some way — but larger SMBs are much more active

2-4 5-19 20-49 50-99Promote the business

in any way 77% 88% 95% 92%Social Media 39% 52% 54% 52%

Local advertising, direct mail 31% 42% 54% 35%

Online ads, Google word search, SEO 18% 31% 42% 40%

Email marketing (e.g. Constant Contact, etc) 14% 26% 38% 37%

Local commerce websites 16% 20% 37% 40%

Online review sites (e.g. Yelp, Angie’s List, etc) 10% 17% 24% 25%

Larger SMBs are promoting their companies more, and through more channels

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Companies find new customers through word-of-mouth and through online channels

“Advertise in income opportunity magazines and in newspapers, and send out information on my products to people who request it.”

“Content marketing has become much more of a priority than public relations and traditional advertising. Referrals will always rule.”

“I am required to belong to a local Business Improvement District and they advertise in local papers. I've sent out press releases and have been on the local news. I participate in the local charities and their events, attending and donating supplies.”

“I only take work from companies that I know and like, that we have either worked with before, or are referred by current customers.”

“Mostly word of mouth but do periodic emails outlining our services. Some advertising in industry related publications. Website.”

“Networking conferences, targeted mailing campaigns, professional directories”

63% responded that word-of-mouth was their main method of finding new customers.

1/3 also said they go online to find new customers

What do they think about Technologyand their Telecom provider?

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They know that Technology has changed the way they do business and is essential to their success

“Almost all sales are posted online. without technology, my business would probably not exist.”

“Everything I do is now web based; from writing contracts, to my website, to social media marketing. I no longer use print advertising.”

“[Technology] has affected every element: how we prospect for new business, how we build brand awareness, how we advertise, how work with our partner companies, how we communicate with prospects and clients and among employees, how we administer our benefits and payroll. Seek advice by soliciting ideas from employees, keeping up on industry trends, trade events, work with independent consultants.”

“It has affected us tremendously. [Technology] has added a lot more expense to our bottom line however it has also produced a more widespread audience thus getting our name out there more.”

“Technology helps in all areas of work. In productivity and in expansion of products and services.”

“Technology is an essential component to my business. It is the great equalizer to my huge competitors.”

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Smaller businesses evaluate their Telecom providers less frequently than larger SMBs

2-4 5-19 20-49 50-99

21%

40%

56%69%

-79%

-60%

-44%-31%

Multiple times per year Once a year or less

How frequently do you evaluate business

telecommunications providers?

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The reliability of their network is the main reason for choosing a Telecom provider

99.9% Network Reliability

No Contracts

No Fees

Money Back Guarantee

Contract Buyout

No Taxes

Free Extras valued at $35/mo

38%

23%

17%

7%

6%

5%

3%

15%

22%

29%

14%

8%

6%

7%

15%

19%

24%

14%

11%

9%

8%

67%

65%

70%

36%

24%

19%

18%

2nd 3rd Total

After network reliability, no contracts and no fees are most important in selecting a provider.

2-4 5-1999.9% Network

Reliability 35% 43%

No Contracts 28% 19%

No Fees 23% 16%

Smaller SMB’s Top Choice

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A 90-day free trial is the best incentive to get SMB’s to consider switching

90-day free trial

Business hardware (e.g. printer, laptop, or TV)

Free month of service

VISA gift card

Daily $500 Cash Giveaway

Free app download to Quick Books or Evernote

38%

22%

10%

13%

10%

6%

18%

22%

28%

18%

7%

7%

13%

21%

22%

23%

10%

11%

70%

65%

60%

53%

27%

24%

2nd 3rd Total

After a free trial, business hardware is the next best incentive.

2-4 5-19

90-Day Free Trial 41% 37%

Business Hardware 25% 22%

Smaller SMB’s Top Choice

Reddit Small Business Forum Analysis

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Reddit Small Business Forum Analysis

To supplement our survey findings, we sourced additional data from the Reddit Small Business Forum — an active community of small business operators (owners, decision-makers and prospective owners) — often new business or those looking to start a business.

Contributors generate regular content about advice they seek and challenges they face.

Specific, tactical insights about decision-makers very similar to those in our survey

Additional concerns and conversations among SMB operators that weren’t discovered in our survey data

Additional areas of learning

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Comparing Survey and Reddit Data

Cash Flow; 8.1%

Economy & Regula-tion ; 2.4%

Strategic Concerns; 22.2% Not Worried; 0.4%

Other; 59.1%Employees; 3.5%

Work-Life Balance; 2.1%

Growth, 1.3%

Retirement; 0.1%

n = 942 unique titles / 8,841 posts n = May 27 - July 24th, 2015

Cash Flow30%

Economy & Regu-lation 19%

Retention & Growth16%

Not Worried9%

Other8%Employees

5%

Work-Life Balance5%

Business Devel-opment/ Expan-

sion4%

Retirement3%

Healthcare2%

Survey Responders Reddit Small Business Forum

Small businesses tend to worry about and seek advice about similar things – with management concerns such as cash flow and the economy topping the list.

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A large percentage of Reddit users also seek business start-up advice

Part of my business name is trademarked (not owned by me) - something I just realized. I feel like I should re-name my company now and save myself a headache later. Any advice?

i'm thinking of opening a dollar pizza shop in New York

Agency/consultancy work - how long does it usually take to get rolling?

I want to open a pop-up & online store. Will distributors and wholesalers ship to my house?

Any small business absentee or part-time owners here? How do you manage a career and side business?

Helping my wife start a business. She plans to sell handmade items on Etsy and at conventions. We are a bit intimidated by some of the starting paperwork.

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They are also looking for help acquiring new customers

How do you get your business to show up in google maps top picks

What online advertising is worth the money?

Experience with Square for multiple services?

[Looking for a] CRM with E-mail Automation?

Local children's entertainment company looking for marketing ideas to grow our business.

Has anyone had any luck with cold-emailing? I'm desperate for new clients but can't get responses

Reddit users sought advice on point of sale software and integration of these solutions with other CRM and accounting software

They solicited direct feedback on marketing efforts and advice on how to leverage and measure SEO, website design, email marketing, social media and other tools

We want to get you involved

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What would you like to know about your audience?

- Let’s work together to craft a questionnaire specific to your objectives and target market

- We’ll then use those findings to craft data-driven insights to aid all aspects of your strategic marketing efforts

- Visit wilsonrms.com to get in touch

We are offering our partners the opportunity to take part in the next phaseof our tracking study.

Thank you!

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Appendix

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Analytics Methodology (Text Analytics)

We employed a proprietary text analytics algorithm for classifying open-end responses and other digital text data into categories for additional analysis

We used term dictionaries created for each of the categories (refined through continuous data exploration) to automate the classification process across hundreds of responses

We validated the accuracy of our classification model using human scored training data and repeated a similar process across several of the open-ended questions with robust enough responses