30 Mar

Which Small Businesses Have Money to Spend?

As the economy recovers, and pent up demand for goods and services starts taking off, you’re going to want to know which small businesses have money to spend.

Obvious targets are the small businesses with the highest profits. Those businesses typically have the highest free cash flows, too. In other words, they have money to spend.

According to Sageworks Inc., here are the 20 industries with the highest EBITDA (earnings before interest, taxes, depreciation and amortization) in the past 12 months, for the period starting 2/16/2008 and ending 2/16/2009. (EBITDA is a proxy for cash flow from operations.)

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Small business with highest EBITDA, 2/16/2008 to 2/16/2009

Small business with highest EBITDA, 2/16/2008 to 2/16/2009

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22 Mar

B2B Decision-Makers Are Socially Active Online

B2B audiences participate in social sites

Over at the Groundswell blog, Forrester has published some research suggesting that B2B decision-makers are extremely active participants in social sites.  They surveyed 1,200 IT (information technology) buyers and discovered:

  • 91% of these technology decision-makers were Spectators — the highest number I’ve ever seen in a Social Technographics Profile. This means you can count on the fact that your buyers are reading blogs, watching user generated video, and participating in other social media. Note that 69% of them said they were using this technology for business purposes.
  • Only 5% are non-participants (Inactives).
  • 55% of these decision-makers were in social networks (Joiners) — despite as mature businesspeople and not college students, you’d think they’d be participating a lot less.
  • 43% are creating media (blogs, uploading videos or articles, etc.) and 58% are Critics, reacting to content they see in social formats. Again the numbers are very high compared to other groups we’ve surveyed, and again the level of participation for business purposes is also very high.

I bolded the last sentence in the above quote because I thought it was significant.

Based on my own experience Read More

08 Mar

Online Buying Activity of Small Businesses

Recently over at Small Business Trends I asked the community to participate in a survey conducted by Working Solo.  The survey was completed by 647 small businesses, and one of the questions asked was:  what do you buy online?  Here are the results:

Chart of online buying by small businesses

I wasn’t surprised by over 90% buying books and other low-cost media online.  I wasn’t even surprised that nearly 86% bank online and pay bills.

But I was surprised that almost 2% don’t buy anything online.  These days that is a rarity.

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24 Feb

Over 70% of the Largest Small Businesses Have a Website

Over 70% of the largest small businesses have a websiteWhen it comes to small businesses having a website, size really does matter.

The larger the size of a small business, the more likely it is to have a website. The smaller the business, the less likely it is to have a website.

According to a survey conducted in September 2008 by Barlow Research of 680 small businesses, drawn from the Dun & Bradstreet list, ranging in size from $100,000 to $10 Million in annual revenues, here is the overall breakdown:

49% of small businesses - currently have a Web site

13% of small businesses – do not have a Web site but plan to within the next 12 months

38% of small businesses – do not plan to have a Web site within the next 12 months

However, averages can mask the true picture.  If you break down the Barlow Research numbers by size of business, the data gets really interesting.

Percent of businesses that have a website, by annual sales size: 

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18 Feb

Why Statistics Are Not Always What they Seem

Statistics and the small business marketThis statistic is making the rounds and lots of people are repeating it:  only 44% of small businesses have websites.  It’s from a survey by Webivisible and Nielsen.

I am skeptical.

Before blindly accepting that as gospel truth, I suggest we examine this statistic more closely.

(1) No one really knows how many small businesses have websites –  This is not something for which you can find hard external evidence.  The U.S. Census doesn’t cover it.  There are no databases of information that will give you a good answer to this question.  So the best that can be done is to take a survey and extrapolate based on that.

(2) Sample size is key in a survey –  The survey referenced above was based on 261 SMBs.  Now, that’s a mere fraction of the 27 million small businesses in the United States.  While I think this survey is an interesting data point, it’s just one data point.  Don’t stake your life or reputation on it, because the sample size is pretty small. 

(3) There’s not enough data about the businesses to make that statistic meaningful – The survey doesn’t say what size of small businesses were surveyed.  It doesn’t break down the responses by age of the business.  Nor does it tell you what industry the respondents are in. 

Those are critical factors that drive a small business’s need for a website and the value the website can deliver. 

In other words, some small businesses need a website more than others.

Let’s take size of the small business, for instance, and examine that for a moment.

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31 Jan

Bad News for Independent Bloggers – Ad Network Closing

Pajamas Media blog advertising networkThe downturn in the advertising industry claims another victim. The Pajamas Media ad network, which placed ads mainly on political blogs, is closing effective April 1, 2009.

According to Instapundit, the business model wasn’t working:

YEAH, the PJM ad-network model isn’t working. I don’t have much to do with the PJM business side, but online ads just aren’t producing revenue like they were a few years ago, and the blog-network thing was apparently a tough sell.

The past five years have seen an influx of entrepreneurs and people looking to make big money or just side income from selling advertising on their blogs (among the 70 million blogs out there). For some independent bloggers this will mean the loss of a nice income stream as one notes:

Damn. I was finally starting to make an amount of money I wasn’t utterly embarrassed by, too.

For another, whose sole source of employment is his blog, the news is worse.  He says he will be out of a job come April.

Read More

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