What Keeps SMBs Up at Night?
September 11, 2019 | Contributed by: Charles Laughlin
This is the latest in a series of LSA Insider posts citing data from our Modern Commerce Monitor™️ small business survey about SMB SaaS adoption. The MCM surveys 1,000 SMBs about their use (or non-use) of SaaS to operate every aspect of their businesses. Find previous posts sourcing MCM data here.
The LSA’s Modern Commerce Monitor™️ survey was brought into being to learn what motivates small businesses to acquire B2B cloud technology. But before claiming to understand what motivates SMBs to buy software, it’s helpful to know what motivates them. Period.
So in the last survey wave, conducted in Q2, we asked a simple question, “What keeps you up at night?” In effect at least, our actual wording was more formal (see the chart below). The answers combine the interesting with the predictable.
What doesn’t surprise us is that SMBs prioritize customer acquisition, with 42% making it one of their top two concerns. That customer retention ranks almost evenly at 41% supports our growing sense that the battle is shifting from a heavy emphasis on acquisition to a more even balance between the two.
As every business owner knows, an existing customer is almost always more valuable than a new one.
The No. 3 priority — “finding enough time to pursue opportunities” — at 40% is very interesting to us. This helps explain why small businesses are transitioning from comfortable but inefficient manual processes to using apps to run their business.
When we ask SMBs in the MCM why they move their business operations into the cloud, the number one answer, consistently across four waves of data, has been to save time or gain efficiency in the business. Clearly, businesses see more opportunities than they have the time to pursue, and they are turning to the cloud to free up some of that time.
The economy was relatively far down the list at 19%. However, the survey was conducted in April and May of this year. Reports of a pending economic slowdown were not part of the national conversation at that time. If the survey were conducted today, the economy would likely be higher on the SMBs’ list of worries.
We decided to take a look at how brand new SMBs — those in business for a year or less — answered these questions. We wanted to see if very new businesses have very different sources of anxiety. It turns out they do. Three quick examples:
- New businesses were far more worried about taxes and regulation than the full sample — 52% vs. 30%.
- They also fretted more than SMBs as a whole about not having enough time to pursue opportunities — 65% vs. 40%.
- And new businesses were also a bit more worried about the economy — 39% vs. 19%.
These differences in some ways reflect the nature of being a brand new business. New businesses tend to operate lean, so finding time is an acute challenge. They are still learning the ropes of operating a business, hence the outsize concern with taxes an regulation. And new businesses are more vulnerable to economic headwinds, which may explain a pretty high level of economic anxiety even while the economy was performing well.
Insights like these are helpful to companies building software for SMBs, to understand which pain points to address, and for which personas.
Interested in learning more about the Modern Commerce Monitor™️ and how its insights can help your company navigate the shifting sands in local? Send Jeff Congo an email at Jeff@TheLSA.org, and we’ll set up a briefing.
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