Did you know that 99% of private employer firms are medium-sized businesses with less than 500 employees, and 89% are small companies with 20 or less employees?
Small businesses are the true drivers of innovation and growth in America today.
That's one of the conclusions in The State of Small Business in America report by Goldman Sachs and Babson College
"Too frequently, the conversation around 'innovation' is limited to new venture creation," they pointed out, "often in the context of a technology-based, venture capital-funded ecosystem. The out-sized focus on technology-driven innovation and entrepreneurship has led to the creation of business ecosystems and related policies that largely ignore the innovative potential and business growth opportunities for the vast majority of small businesses across all industries."
While this covered a wide sampling of American SMBs, the focus was on the key characteristics of 1,679 high-growth firms in the Goldman Sachs10K Small Businesses (10KSB) program. High-growth firms are key to understanding markets because they have thrived while the national economy has stalled.
This investigation into high-growth SMB technology led to the findings such as:
- Nearly two-thirds (62%) concentrate on customer experience by investing in quality improvements for existing services.
- Almost half (46%) are busy promoting the release of their latest innovation;
- Over a third (35%) are driving R&D for innovative products or services for the future;
- Around a quarter (24%) have just opened a store in a new location.
- About half (47%) cite technology costs as a top concern.
The report focused on three areas of concern for businesses: capital, the regulatory enviroment, the workforce, and technology.
If you have trouble accessing the financing you need to grow your business, you aren't alone. Growing businesses aren't immune to the capital crunch. They struggle to get the funds they need to invest in technology and development, and need loans with more flexible terms. While banks remain the number one source for SMB funding, businesses are only receiving 40% of the funds they request.
Tech companies such as Amazon and Square are stepping up to the plate with innovative products such as Square Capital, which pays the loan back with each transaction across Square's mobile POS platform. Crowdfunding and other creative financing models will continue to gain traction as long as capital-starved businesses need cash.
SMB technology to help businesses connect more quickly with funds when opportunity strikes are a big opportunity to grow companies.
Regulations and the paperwork to keep up with them are a major headache for small businesses across industries. About 60% of respondents had trouble understanding or interpreting regulations. On average, companies spend a 200 hours a year navigating the regulatory landscape. This is complicated by the layered nature of regulations, from federal to state to municipal ordinances. Most companies manage regulations in-house, with the owner taking direct responsibility.
Companies spend on average 5 weeks each year understanding and managing regulations.
Building companies that specialize in managing regulations might be a big boon for both entrepreneurs and existing companies struggling under the weight of regulations.
Workforce management is a number one concern for small businesses. Talent is the new capital, and developing talent results directly in innovation and growth. But finding candidates with the right skillset is overwhelmingly a big challenge for small business. The majority (72%) had difficulty hiring qualified people.
Hiring and retaining talent is one of the top two growth challenges for companies.
The cost of new SMB technology is a challenge for nearly half of surveyed businesses. While only 5% of companies are tech companies, technology is playing an increasingly essential role in how business is done. The majority of small businesses (78%) feel that technology is extremely important to the growth of their business, while half cite cost as a top concern. Likewise, cybersecurity is a growing area of focus for companies, who want to protect their data and their customers. Technology costs and cybersecruity are the top concerns of growing businesses.
SMB technology that grows your business
At Spoke, we've created a phone system that helps your business grow by deploying smart features to help you mange calls professionally. Designed for small businesses, Spoke can save you money while providing enterprise level functionality across your employee BYOD network. Drop by our FAQ page to discover if Spoke can help solve your biggest challenges in managing the cost and complexity of new technology.