Inc., the most well-known magazine for small business and entrepreneurship, posted some insight this week about the ever growing small business sector. As a follow-up to their news earlier in the year about the good economy and the fact that businesses are revving their engines, Inc. staff writer Jeremy Quittner shared some profiles on where new firms and growing SMBs are getting startup cash.
“Prior to the recession, businesses had to rely primarily on small networks of family and friends for seed financing,” wrote Quittner, “eventually graduating to some form of traditional finance, usually from a bank.”
It’s not just the advent of the internet that makes new options possible. Changes in financial regulations since the 2008 financial crisis and the surging importance of social media have contributed to the growth of a new financial sector, alongside the new growth in small and medium-sized businesses.
While crowdfunding sites Kickstarter and Indiegogo are popular with people for everything from publishing a book to raising money for the launch of a startup company, there is also a new generation of non-banks targeted to smart young entrepreneurs. According to The New York Times, which also started tracking the trend, smaller lenders like Fundbox and Akouba Credit have stepped up to the plate to lend innovative new products companies and services firms the credit they need for short-term operational costs and longer-term purposes. And ever since the passage of the Jumpstart Our Business Startup Act of 2012 (better known as the JOBS Act), Inc. says that for the first time businesses can directly solicit investors as they wish.
One question that comes to mind is: on what kind of things does this new generation of SMBs spend their cash?
According to B2C, answers vary. While 51% of small businesses said they spent money either replacing old equipment or maintaining their information technology, 38% of small businesses said that 2015 will see them invest extra cash in new projects. But where does marketing and advertising come in?
Well, that’s where small businesses tend to spend very little, dishing out only 3% of their capital on marketing, versus the 10.2% that is the national average. That being said, 60% consider social media an important marketing tool and 59% of small businesses interviewed said that they see their website as an important marketing tool.
Probably one of the reasons that small businesses have historically spent little on “marketing” as a general concept could be that, in years past, there were not a ton of marketing and advertising options that were economical and feasible for small businesses.
If you as an owner have grown your business consistently on word-of-mouth, reputation and customer service in a specific sector or locale, it is probably fair to say that a billboard on I-95 or near the airport won’t help much. But small companies still need to get their name and brand messages out there to stay in business. And that is where advertising specialty distributors come in.
As we mentioned in a blog post back in January, just the fact that your best customers and prospects have website and social media is a very good start. And businesses often look for ways to let their own customers know that they can view their websites or follow their social media channels.
There is no better way for your customers to have their business names, their logos, their identities and info such as website links or social media handles in the hands of their customers than with promo products and specialty advertising items.
As ASI, pointed out in their Impressions Study, not only do consumers keep promo products like pens, drinkware and wearables, they also use them regularly and love them too.
The small business sector is growing and business are profiting, but they still looking for ways to grow further. Don’t hesitate to talk to businesses about what you offer: the power of promo products and reminder advertising to build SMBs’ brands.