The State of Small Business Growth in 2016
[Industry Survey of 1,306 Entrepreneurs]
After years of hard work, sleepless nights, and too much stress, your business has become secure. Stable. You no longer have to worry about how you’re going to pay next month’s bills or if your work is drying up. Now you’ve got the time to look forward, to be creative and focus on growth, instead of scraping by and constantly riding on the Cashflow Rollercoaster.
How did you get there?
You established yourself as a leader in the industry, made sure you were seen as the go-to person. At the same time that you established your authority, you incorporated processes that kept leads coming in consistently and reliably. With steady leads came more clients and with more clients came regular positive cash flow.
How many small business owners are actually achieving these things?
We surveyed 1,306 small business owners and entrepreneurs to gain a better understanding.
Read on for some amazing insights on what they’re struggling with, their goals for the next year, and how they’re planning to improve their business. You’ll also discover some very interesting trends, as to what separates the successful businesses from those who haven’t quite made it yet.
An Overwhelming Number of Business Owners Plan on Growing in 2016.
What are their growth goals?
About half of our survey respondents say they want to grow 50-100% in the next 12 months. Another 20% say they want to grow between 25-50%.
Why do Business Owners Want to Grow Their Businesses?
Almost 40% say they are in business because they want more freedom, and 22% want to make a difference! Both are goals we can all appreciate.
In their own words
“I want to scale the business without giving up my freedom.”
“My goal is to move from 1:1 to 1:many – and having a program in place that would appeal to my avatar – and then building the systems to create the flow of leads and convert them into new clients – so that I can achieve the impact, influence and income that I desire.”
“I feel that I need to revamp my business and come up with a business model and structure that will move my business to the next level.”
Achieving this sort of growth is no small feat. The question is, do these small business owners have the right strategies in place to achieve this level of growth? Most do not have processes in place to consistently generate leads.
Most do not have processes in place to consistently generate leads.
Despite these lofty, yet absolutely achievable, growth targets, 84% of responders say that their current lead generation strategies are NOT sufficient to reach their goals.
This is an extremely important piece of the puzzle that 84% of business owners are missing.
And when it comes to generating more leads and appointments, one of the key elements is a plan that makes multiple touch points and moves prospects through your enrollment or sales process.
Frequent and consistent communication keeps you top of mind. If prospects don’t know about you or don’t remember you, they aren’t likely to convert to an appointment; and if you’re not generating enough leads and appointments, you likely won’t have enough clients to reach your goals.
It’s that simple.
With that being said, we found that only 18% of survey respondents keep in touch with prospects and potential clients on a weekly basis.
There’s a connection there, between communication and lead generation. If you don’t communicate with prospects, you won’t be generating enough leads.
So if that’s the key, why aren’t more business owners working on this?
In their own words
“I don’t have a good system in place.”
“I don’t have enough time.”
“Not quite sure where to start or how to go about some of these marketing projects.”
Most business owners struggle to stand out from their competitors.
Standing out from the competition is a crucial step in the communication process that turns prospects into clients. So how good are small businesses at this?
60% of business owners say they’re confident demonstrating what differentiates them from the competition.
But when you combine different pieces of data, a different story comes out. Of respondents who said they have VERY FEW differentiators, 92% said they sometimes or consistently have cash flow problems.
And out of the respondents who said cash flow is NEVER a problem in their business, 68% answered “4 or 5” (they have several to many differentiators).
Communicating why a prospect should choose you over the competition, appears to be a very important part of the equation.
In their own words
“Our biggest challenge is getting the message out about how what we offer is different from other products and services.”
“We’re having trouble connecting with people who are not just looking for the cheapest price without regards to quality and results.”
“I don’t have the knowledge on how to market in a way that is unique and provides a … WOW.. factor from the competitors.”This causes them to have cash-flow problems.
This causes them to have cash-flow problems.
Cash-flow problems are far too common in startups and small businesses. According to our respondents, only 12% of business owners say that cash flow is NEVER a problem in their business.
Of respondents who said maintaining cashflow IS a consistent problem in their business, 77% also said they DO NOT have processes in place that consistently generate new leads and clients.
On the other hand, out of the 13% of business owners who report that they DO NOT have cashflow problems, 83% of these profitable, successful businesses DO have systems in place to generate leads and appointments consistently.
Clearly those businesses who are more successful have one thing common. They have systems place to generate leads and appointments consistently.
For the businesses who reported struggling with cash flow, it’s clear that a lack of systems is creating significant problems and challenges.
The good news about these cashflow problems (yes, there is some good news) is that they seem to decrease as a business becomes larger.
According to our survey, businesses with sales less than $100K have the most problem with cash flow, but fortunately, that problem gets incrementally less as total sales increase.
The data supports the conclusion that marketing systems to generate more leads and clients are one of the key ways to make it happen.
In their own words
“We are constantly fighting the cash-flow battle. We need to market more, but we lack the funds to create a constant marketing campaign.”
“Feast or famine. Workload month to month can vary hugely.”
“[I] don’t have the cash flow to fund growth.”
Most realize that they need to do something different to reach their goals, but aren’t sure what to do.
Respondents plan to try everything from hosting a podcast, to writing a book, to blogging in 2016, but the largest percent of survey takers plan to use social media to reach their goals.
Social media is one of the most efficient ways to engage with prospects, build up your reputation, and start converting prospects into leads, appointments, and clients. Unfortunately, most small business owners don’t know how to get the results they want from these platforms. They lack the structure and processes to consistently generate leads through these channels.
Out of the 71% of business owners that have used social media as a lead generation tool, only 6% say they’ve gotten great results. A whopping 57% of them say that they’ve gotten poor results from social media.
It gets worse.
Out of the small number of leads that small business owners are able to scrape from their social media efforts, very few are converted into paying clients. 49% of business owners convert these leads at a rate of 10% or less.
In their own words
“I would like social media to make me money.I have 1400 followers on Facebook and 400 followers on Twitter and still have not made a dime from either.”
“I don’t know how to use social media for selling services.”
“Need to understanding how to use social media in a way that is easy to implement and keep up with.”
Bottom Line, Time for change and Small Business Owners Need Help
Luckily for you and me, and for the economy, the small business sector isn’t going anywhere. But that doesn’t mean any specific one of these business owners is guaranteed to succeed.
Yet based on the results of this study, it’s clear what they need to do in order to position their businesses for a bright future. Creating systems in the marketing department, to gain and retain the attention of prospects, and therefore increase the pipeline of leads, appointments and clients coming through the door; that is the most compelling mandate that this study offers.
It’s a simple truth. In order to grow, a business needs marketing systems to get the word out and bring in prospects and clients.
You also need to have a way to stand out from your competitors and position yourself in a way that will compel your ideal clients to want to talk business with you. And to have the right processes in place to convert these appointments into paying clients, so you can get off the Cashflow Rollercoaster and achieve greater impact and freedom…the reasons most business owners started in the first place!
In their words
“B2B small biz owners continue to struggle in this economy. We simply have to adjust our lead-gen strategies to change with the market.”
“For my business to grow, I will need to expand my marketing.”
So, tell us about your business. How do these findings sit with you? And what takeaways can you apply from this study?