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December 06, 2005
Selling to small businesses
It's what everybody is talking about, right?
Certainly, there are a lot of people salivating over the small business market because it's a pretty gigantic market. But then, you have to stop and think about this stuff and Mary is very right. Just because there are 24 million small businesses in the country, that doesn't mean that the market for your small business product or service is that big.
For example, this publication is written for microbusinesses, and there are about 22 million of them in the country last time anybody counted. But subscribers to The MicroEnterprise Journal need to be making enough money to afford the subscription, which probably leaves out the 30% of them (or 6.6 million) that earn less than $5,000 in average annual revenue.
It's probable that microbusiness owners who are politically conservative will not take much pleasure in reading what is written here, either. The numbers of microbusiness owners who lean independent or moderate/progressive are probably similar to the general population, so that would leave another 40% or so of microbusiness owners out of my potential market (or another 9.34 million).
Another qualifier is that subscribers to The MicroEnterprise Journal would need to have Internet access and be comfortable with purchasing online content. I'm not sure if there's any recent research on that; Forrester looked at the general population back in 2002 and found that 19% of consumers are likely to pay for access to national news and 23% are likely to pay for local news.
So far, my potential market is down to about a tenth of where we started, from 22 million to about 2.8 million ... and I'm sure I could think of other qualifiers if I pondered the matter long enough.
I hope you see what I'm getting at here. You can drive yourself crazy if you try to pitch to the entire microbusiness market because it really is huge and fragmented (you don't find them all in one spot, now, do you?) and expensive to market to in its entirety. Besides, it's such a large and diverse group that I can almost guarantee not all microbusiness owners qualify as potential purchasers of your product or service — no matter what it is.
And there are a lot of unknowns here.
Anita Campbell, over at Small Business Trends, is doing a bit of research to see what more can be learned about marketing to small businesses. There will be more about this in this week's MicroEnterprise Journal but, in the meantime, go check it out.
Posted by The Journal Blogger at December 6, 2005 08:02 AM
Comments
Here in NM I work with many micro businesses - and they're a gutsy bunch and want to take chances. However - as to their potential as a target market for web biz support and on-line services - it's a tough slog. They're still asking what the difference is between a blog and a web site. And, if they have a web site, all too often it's a static, neglected collection of pages put together by a web hobbyist. As I do my missionary work with the "Mom and Pops" the light starts to dawn about the potential of the Internet as both a biz dev resource as well as a revenue generator for them. Yet, it's still a long way from their "Aha!" to action.
So, comes down to not only the numbers, but also the level of - let's face it - sophistication of the target. Doesn't do much good to sell sports cars to folks still enamored of buggy whips.
Posted by: Mary Schmidt at December 6, 2005 12:06 PM