Ever wonder what drives a seemingly sane person to go out and start a business? For 55%, it’s a desire to be their own boss, according to Small & Medium Business Trends Report, a study released on Monday by Salesforce.
Roughly tied for second among the attractions are having a more flexible work schedule (36%), pursuing an opportunity that presents itself (36%) and a desire to make more money (35%). Only 25% are motivated by having an idea they believe in and bringing it to the marketplace.
Whether they succeed at any of it is dependent on several factors. Technology is one of them.
Salesforce breaks down companies into two groups: Growing SMBs, which have 1% or more revenue growth over the past two years, and stagnant/declining MBs, those that have less than 1% growth.
The split between them is apparent in the technologies they use to attract new customers.
Social media marketing on top, specified by 46% overall. That includes 49% of the growing companies, an 41% of the non-growers.
Email marketing is used by 38%, but that average is made up of 41% of growing companies and 32% of the stagnant ones. In other words, growing businesses are 29% more likely to use email to generate leads.
“Acquiring new customers is the most frequent obstacle reported by SMB leaders (67%),” the study notes. “Some of the most common tactics used to solve this challenge are social media and email marketing.”
Meanwhile, marketing automation is used by 20% of growing firms and by 14% of those on the downward slope, for an overall average of 17%.
CRM systems are utilized by 19% and 23% of growing firms and 10% of those in the stagnant category. And analytics is in the stack for 21% of the growing firms and 17% of the declining firms.
The differences between the two sets of companies on the are also apparent in the technologies they want to invest in.
Stagnant firms are most likely to want basic hardware (31%), internet hosting services (26%) and financial software (25%).
In contrast, 35% of growing SMBs want CRM systems, 34% want financial software and 28% want high technology.
Small businesses and medium-sized ones also have different needs.
Among the medium-size respondents, 44% cite CRM systems as a top priority for their tech budget, compared with 24% of small startups.
In comparison, small businesses are more interested in hardware (32%), versus 21% of medium-sized firms. But 25% of the small outfits and 23% of the medium-sized ones seek internet hosting/internet service providers.
In another clue to priorities, marketing ranks only fourth in the list of investments, while sales tops the list.
What does it take to start a successful small business?
Of the owners polled, 38% cite self-discipline, and 33% cite people and communications skills. However, females put self discipline second — their top requirement is people and communication skills.
Male executives don’t even list people skills among the top three: for them the top requirements are self-discipline (40%), personal passion and drive (34%) and market knowledge (32%).
Similarly, while men and women face the same constraints, they put them in a different order. For men, it’s hiring the right talent (62%), money/access to capital (57%), and insufficient time (56%).
Females list the top challenges as access to capital (62%), insufficient time (60%) and hiring the right talent (55%)
Overall, 78% are optimistic about their future prospects. And 60% seek to grow their business, although 36% want only to maintain it. On the downside, 53% feel at a competitive disadvantage versus enterprise in meeting customer expectations, the study says.
SMBs cite these challenges to growth over the next two years:
- Maintaining financial growth — 68%
- Meeting customer experience expectations — 58%
- Hiring and retaining employees — 55%
- Establishing/maintaining processes — 52%
- Scaling technology — 50%
Salesforce surveyed over 2,000 SMBs in North America, Europe, India, Australia and New Zealand.