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Newsletter Archive - Research

What is a "Small Business"?? Inquiring Minds Want to Know. - Part 2

07/27/2005 - In last month's Research article, I noted that Yellow Pages is often considered a primary advertising source for small to mid-sized businesses. But I began to wonder a little about that premise since I have a small business that has been around for nearly two years, and have never gotten a call from a Yellow Pages publisher despite the presence of four of print publishers in my area. How come? Could it be because I run the business from my home? Could it be because my cell phone is the official company telephone number listed with the state the business is registered in? So I went in search of a definition of exactly what a "small business" is. And I opened a real Pandora's Box.

The definition of a "small business" from readers was all over the map. On the high side, one Yellow Pages executive sent me a note that the site would gladly tell me that small businesses are "..those companies with 1,000 employees or less." Contrast that with many answers that were similar to one I got from Lee Hamill, VP - Marketing & Business Development at ALLTEL Publishing - "We would generally consider a business with 25 or less employees a small business."

But all those who responded noted the real issue for Yellow Pages sales to small businesses wasn't so much the definition, as it was finding them. Joel Raphael of ViewPower summarized it best:

Finding "small businesses" to contact to sell YP ads to is further complicated by use of cell phones as primary numbers which is a growing idea among younger people and independent contractors such as construction people who don't use much of a real office. It is also an issue for people who use a "residence" number for most of their business contact.
Most of the responses from publishers were the same as this one from David Roberts, the COO of Caribbean Publishing Company:
The biggest problem we have on all islands is getting an accurate figure of the number of businesses vs. the number of business lines. We use the number of advertisers we have plus the number of free listings we have in a particular directory, then add 10% max. to cover home base businesses without a business status phone & cell phone only businesses. We then take our number of paid advertisers against this figure to measure penetration..
And this one from Maria Mitchell of Yellow Book:
When we are planning our entry into a market, we factor 'all businesses', not just small businesses, into our analysis. We have a formula that we use that then estimates our potential penetration. The size of a small business never enters into it.
After you find them, what's keeping those owners awake at night? Once again, we got a wide range of answers, so we turned to a recent study from Interland, specifically their Spring 2005 Business Barometer. Not surprisingly their top business priorities/threats were: But the study also revealed that many business leaders are also thinking a lot about the Internet, believing that their business Web sites influence overall sales, both on-line and off-line. An amazing stat was that 94% said their businesses had Internet access at their business, and seven out of 10 indicated that email was very/somewhat critical to their business.

Other critical marketing tactics that small businesses use: If you'd like to see the complete report, click here.

The results of this study describing small business marketing techniques seems to be consistent with the most recent user survey by The Kelsey Group and ComStat Inc., which found that although traditional ways for consumers to find local businesses were still most pervasive, the percentage of shoppers using Internet search was growing exponentially. The print Yellow Pages are still the No. 1 way to find a business (75%); newspapers are next (73%), followed by white pages (58%). Search engines are now being used by 57%, an impressive jump of more than 10 percentage points in the past year. And, most importantly for this industry, the frequency of usage is highest for search engines as compared to traditional ways of finding a local business. Additional findings from this year's study will be presented at The Kelsey Group's Directory Driven Commerce 2005 Conference (DDC2005) taking place September 27-29, 2005, at the Denver Marriott Tech Center, Denver, Colorado.