The American Express OPEN Small Business Monitor semi-annual survey now includes a Success Index to identify commonalities across thriving businesses that can provide lessons for any small business. The index profiles four groups of entrepreneurs called high achievers, strivers, sustainers and strugglers. High achievers represent six percent of the total survey sample and, on average, have spent 26 years in business, employ 18 people in their firms and have attained business growth of 34 percent over the last three years, versus 10 percent growth for the total survey population. A comparison between the high achievers and the total survey group uncovers a host of key differentiators of which small business owners should take note.
High achievers take more risks. More than two-thirds have increased their appetite for risk compared with one year ago (67 percent versus 35 percent of the total population).
High achievers don’t just plan for growth, they make it a priority. A majority of high achievers say they are planning to grow their businesses over the next six months (93 percent, versus 69 percent of the total survey group) and 51 percent have growth as their top priority (versus 31 percent of the total survey group).
High achievers invest in their business. More than three-quarters (78 percent) are planning to make capital investments (versus 49 percent of the total survey group).
High achievers provide incentives to customers to get repeat business.
- 84 percent are placing heightened focus on better serving customers to set their business apart from competitors (versus 78 percent overall).
- 40 percent offer loyalty rewards (versus 22 percent overall).
- 41 percent offer differentiated products or services (versus 23 percent overall).
High achievers leverage social media. Seven in 10 use social media (70 percent versus 49 percent overall) and more than three quarters (79 percent) use social media to attract new customers (versus 57 percent overall).
The Success Index was developed based on self-reported responses to questions regarding business growth and characteristics correlated with high-performing entrepreneurs. Based on a 100-point scale, four distinct levels emerged: “Strugglers” (scoring between 0-40 points), “Sustainers” (scoring between 41-60 points), “Strivers” (scoring between 61-80 points) and “High achievers,” who scored highest on the Index (between 81-100 points).
When it comes to marketing, the survey revealed that entrepreneurs are using low-cost methods, such as social media (35 percent), educational marketing (16 percent) or partnering with non-competitive businesses to stretch their budgets (11 percent). More than half of business owners use social media tools to attract new customers (55 percent), up from 50 percent last fall). Platforms they are using include:
- Facebook (38 percent)
- Google+ (14 percent)
- LinkedIn (13 percent)
- Twitter (11 percent)
- YouTube (10 percent)
- Blogs (6 percent)
- MySpace (4 percent)
- Foursquare (2 percent)
- Pinterest (2 percent)
While social media use is on the rise and correlations to growth are becoming more apparent, just 27 percent say a social media presence is necessary for their company, a similar number (28 percent) say it is “nice to have” and more than one-third (39 percent) find it unnecessary. Most business owners tackle social media during daytime working hours (31 percent); 23 percent tackle it after work and just six percent outsource it. Looking ahead, 41 percent of business owners plan to increase their company’s social media presence in the next year.
The survey also found 56 percent of respondents have a positive outlook on business prospects over the next six months, up from 48 percent last fall.
American Express OPEN Small Business Monitor, released each spring and fall, is based on a nationally representative sample of 813 small business owners/managers of companies with fewer than 100 employees. The anonymous survey was conducted via telephone by Echo Research from February 27- March 15, 2012. The poll has a margin of error of +/- 3.4 percent.