Did You Know 28 million Small Businesses account for 54% of the Annual Sales in the US?
Small businesses are actually big! The number of small start-ups in the country has risen by around 54%, showing how integral they have become to the economy. There are millions of small business owners across the US, currently making it big in their sectors.
Facts You Need to Know About Small Businesses:
Let’s take a quick look on the surprising facts about the small business trends.
- Small businesses occupy 30% to 50% of the commercial space in the US.
- They facilitate with 65% of the new jobs since 1995.
- A total amount of about 5.78 million firms in the US exists in the US of which 17 million which employ 20 or fewer people.
- 600,000+ small franchises in the US share 40% of all the retail sales.
- Small business owners added 8 million jobs since big business eliminated 4 million jobs.
- 28 million small business owners account for 54% of the combined US Sales.
- They represent more than 7% of the US employers.
- They produce an estimated GDP of $6 trillion.
- Around 130 million employees are working with small businesses.
- 97% of the US exporters of goods are small business owners.
- Average revenue for small businesses accounts for $3.6 million.
The image from below shows the growth rates of small start-ups in a few US States.
The amount to start a business may vary. Usually they are easier to form unlike big enterprises. For this reason, women entrepreneurship and home based businesses is commonly seen in small business start-ups.
It’s incredible that 38 million of income is generated from home based businesses. Additionally, 72% women own home-based businesses in the US. These facts and figures confirm that the small business start-ups are growing rapidly and rate of small business failures has declined in the US.
Around half a million businesses start-up each month and may shut down. A lot of businesses are launched in a month and many of them fail each month. The failure rate for the start-up businesses is in between 80% to 90%. But why does it happen? You need to review your business idea in this regard.
The Vanilla Strategy for Small Business Start-ups
A vanilla strategy is a basic or common decision making approach for businesses. Various business owners use this form of strategy while others excel through innovation and unique selling preposition.
Any start-up small business should focus on the innovative strategy instead of another plain vanilla business. Business based on this strategy may not thrive in future as they are not unique and serve a common purpose likewise other business owners. Business owners should research the industry, seek for the gap in the market, and then penetrate the unique business idea with respect to the customer’s requirements.
Eric T. Wagner (Forbes contributor) identifies that the vanilla strategy is one of the leading reason for business’ failure along with other countless reasons. Additionally, Bplans also determines that the business will be unable to stand among the competitors if it lacks uniqueness. Consequently, forming a ‘me too’ business will lead to closure of the business.
9 Elements Determining Your Business’s Vanilla or Innovative Strategy
All start up business owners should avoid creating a similar idea; instead they should focus on uniqueness. But how can you make your business unique from other businesses? The following elements will help you in determining if your business is another vanilla business or an innovative business in the market.
1. If You Can Explain Your Business’s Innovation is different from Other Businesses
If someone asks you about your business uniqueness and you cannot answer it properly. Then, your business probably may not be unique or innovative. Before you launch your business, you must ensure to properly research and analyze the market. Furthermore, you should know about the gaps in the market which are not considered by your competitors.
Then, you need to come up with a creative idea to cater the customer’s needs. You must ensure that the idea is unique and apart from all the competitors onboard. Once you create the creative idea, you will be able to explain it to all your customers and clients and make your image distinct from others.
2. If You Can Do Something Different From the Competition
If you are planning for a similar business operation like other competitors in the industry then you should try choosing a distinct way to operate it. It is imperative to identify the way to perform it differently. Most of the services are standardized and thinking out of the box in this perspective, becomes very challenging. But, these industries and customers demand for a new change. For example, if you are planning to give a taxi service, you can permit clients to call taxis via mobile apps.
3. If Your Business Gives More Value to Customers than its Competitors
Customers seek for value. They become loyal to the ones who offer valuable goods and services. If you can provide better value to your customers than your competitors, then you can become one of the most the dominant business owners in the industry.
4. If Your Business Offers a Single Unique Quality which Your Customers Can Associate with
Your business will be on top of your customer’s mind even if you offer a single unique feature. That distinct feature could be anything in your business. It could be your shop’s architectural design or interior, your friendly customer service, your organized packing of products, your brand’s personality, the quality of your goods or products, and many others.
Customers would remember your business if you give them the opportunity to remember with the help of putting in unique features. They just require some association to keep your brand in mind. If you have the unique element, then you need not worry.
5. If Your Business Offers a Unique Solution to a Common Problem
Usually all problems are standard in the industry. But, the solutions can be different in several ways. Thinking about that innovative solution is a challenge. Your creative idea should benefit all the customers in a unique way to excel in the industry.
6. If You Offer Competitive prices
Price is one of the factors that keep you unique. You can either follow a market penetration (keeping lower prices) or a market skimming (keeping higher prices) pricing strategy. It is not always necessary to sell at a lower price, higher price can associate your brand with high-quality image among customers. However, a lower price gives you the edge to penetrate the market and gain the most from the customers. You should set the level of prices according to the competition prevailing in the market.
7. If You Can Provide the Product or Service Faster Than Other Competitors
Speed is the game changer for industries. As long as customers are getting faster and quicker services or products, they will pay you more. You can take an example of Amazon free in this regard. Their free two-day shipping is highly preferred by the customers. You must ensure that your business provides faster services than your competitors.
8. If You Care For Your Customers Better than Your Competitors
Caring for your customers is the key to success. If your business start-up focuses on providing better customer care to the customers, you can become a leading market player in the industry. Treating your customers right, with respect, value and care can help you in excelling the industry.
9. If Your Business has a Unique Branding
Having a similar image like other competitor’s business will likely blend you in the crowd. Unique blending is a solution for your business to keep you distinct from other competitors. Your image is built on your branding so it must be innovative and separate.
As per Tom Egelhoff (marketing professional), two companies belonging to same industry can never occupy same perception in consumer’s mind at the same time. Consequently, the significance of unique branding should not be avoided by the business owners.
Small business start-ups have an enormous impact on the national economy. But it is important to start up a unique and innovative business, unlike the prevailing vanilla strategy based businesses. It is always better to differentiate your business strategically. You must ensure not to be a clone in the industry when you have a market share. Making your business innovative will eventually make you successful.