Independent Thinking Blog

What Makes a Small Business Successful?

Not surprisingly for a business conference, the state of small business was the topic of much discussion at GrowSmartBiz. The anchor: the Small Business Success Index, a survey of the competitiveness of small businesses (defined as privately-owned, with 100 or fewer employees, and/or contributing at least 50 percent of the owner’s household income).

The report is a useful snapshot of why some companies soar while others flounder. The survey measured success across six areas: access to capital, marketing & innovation, workforce, customer service, computer technology, and compliance.

Here are a few of my takeaways:

1. Only 24 percent of small businesses are “highly competitive” (with 28 percent marginally so). Those that are most successful tend to have multiple owners, are more likely to be women-owned, and are more likely to be mature businesses.

2. Small business owners are generally satisfied with their career choices (i.e., we’re a pretty happy group).

3. Small business owners are typically optimistic about their long-term prospects (65 percent), although the short-term outlook appears more mixed (with 38 percent thinking the economy will improve in the next 12 months and 28 percent thinking it will decline).

4. Plugged in businesses are more competitive, which makes sense when you realize that only 53 percent of small businesses have a Web site. More use e-mail, but this suggests they’re relying on Hotmail, Yahoo, and other provider accounts instead of securing a domain of their own.

5. Companies who report a social media presence: 17 percent (up from 12 percent six months earlier).

The entire report is short (6 pages), but the insights seem to reinforce the fact that innovation and business savvy are key. What’s your takeaway?

Photo by mkreyness (Flickr).

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