Research Roundup: Big Picture, Little Picture

Research Roundup: Big Picture, Little PictureAugust was crowded, as far as small business research goes. So, without further ado, here’s a good sampling:

Devil in The Details

Verizon released a survey late last month which found that larger-revenue small businesses are more likely to have Web sites than smaller- revenue firms — at least, within limits.

They found that 56 percent of firms with revenues between $250,000 and $750,000 have company Web sites, while a much more substantial 73 percent of firms earning between $750 and $2 million have company Web sites.

There were also a number of drop-dead-obvious findings, like the fact that having a Web site makes you better at estimating how much time it takes to maintain one, and some stuff that could make your eyes cross, like the fact that you’re less likely to know how to attract customers to your Web site if you don’t have one.

It would have been interesting to see how even lower-revenue firms (under $250,000) would have fared with this survey. I suspect that Verizon might have replicated other market research I’ve seen lately, which found that online microbusinesses are even more likely to have company Web sites.

Other small business market research released last month from pay-per-click search network operator LookSmart found that SMB advertisers rank ROI as their top priority in PPC campaigns (63 percent), followed somewhat closely by traffic quality (53 percent).

The LookSmart bright boys seemed a little surprised at another finding: the low priority given to customer service by SMBs — although it’s not too shocking, given that most of their customers use their self-service platform.

Development, Without the Bright Lights and Big Cities

Growing rural economies was a somewhat hot topic in research-land in August, thanks to a couple of papers that tackle the unique challenges of rural economic development in the 21st century global economy.

The International City/County Management Association (ICMA) released a paper highlighting “smart growth strategies that can help guide rural growth while preserving the unique rural character of existing communities.” Those strategies basically boil down to supporting the viability of traditional land uses (i.e., farming); helping communities to preserve existing, historically vested places; and building vibrant new places that will draw and hold population (especially young population).

The other paper gets into the nitty-gritty of rural development in the Midwest, where manufacturing had been the heart and soul of local economies. Those industrial concerns have faded fast, and Midwestern rural economies have faded too. Development authorities continue to compete in what they call “industrial recruitment” — smokestack chasing.

In this paper (Past Silos and Smokestacks: Transforming the Rural Economy in the Midwest), Mark Drabenstott, Director of the Center for Regional Competitiveness at the Rural Policy Research Institute, argues that 21st century economic strategies demand regional partnerships that leverage rural resources to compete globally.

“Only by combining their forces to create new businesses and good jobs at home will the towns and counties of the rural Midwest compete and thrive in a global economy where this kind of collaboration is fast becoming the norm,” writes Dr. Drabenstott.

While these two papers are very different in their orientation, they both say essentially the same thing: The way policymakers and development experts are thinking about rural development isn’t working. That means they need to do something else, ne?

I wouldn’t have thought you’d need a Ph.D. to figure that out, but what do I know?

Jobs Growth — or Not — in August

So, what about those jobs-jobs-jobs?

The consensus right now seems to be that the recovery has a case of the hiccups … or something. We’re expecting the August employment situation release from the Labor Department on Friday but, in the meantime, the August 2010 National Employment Report from ADP was just released.

The picture is not what I’d call encouraging.

For starters, the previous estimate of 42,000 new jobs from June to July was revised downward to 37,000 jobs. Even worse, August was a tough month, especially for small businesses.

After registering job growth for six straight months, ADP’s estimate for private  sector non-farm employment change declined by 10,000 jobs. Large firms saw a net job increase of 1,000, but both categories of small firms experienced net decreases.

Medium-sized firms (50-499 employees) had a net decline of 6,000 jobs and small firms (1-49 employees) had a net decline of 5,000.

In light of some other discouraging economic news, you have to wonder: wither away, recovery?

Late Summer Releases From the SBA Office of Advocacy

Are the self-employed changing? Are there real differences between generations of entrepreneurs?

The SBA Office of Advocacy released a report last month that took a look. What they found was a measurable difference between the generation born in 1960-62 and that born 20 years later, in 1980-82. The younger group had a higher probability of being self-employed by age 23.

The researchers attributed the difference to higher percentages of African-Americans, Hispanics and, to a lesser extent, women in the younger cohort of subjects. That may be true, but I think a big part of the difference may have had more to do with growing up in different times.

Overall, the research shows that those who reported self-employment in their early 20s (ages 20-22) are much more likely to remain self-employed through age 41. I guess it’s once an entrepreneur, always an entrepreneur.

Also worth noting from Advocacy was a report on gender and business dynamics, appropriately entitled Gender and Establishment Dynamics, 2002-2006.

The report “found” a lot of things that seem pretty obvious (e.g., larger firms are less likely to close, and tend to both create and destroy more jobs) but it’s most interesting finding was a confirmation of earlier Kauffman research: Real job growth comes from new firms.

Is anybody listening?

3 Comments ▼

Dawn R. Rivers


Dawn R. Rivers Dawn R. Rivers, an award-winning small business journalist, regularly reports and analyzes small business policy and research as the publisher of the MicroEnterprise Journal. She also publishes research at the Microbusiness Research Institute and she blogs at The MicroEnterprise Journal Blog.

3 Reactions

  1. Dawn,
    Great article. I’m certainly listening. Around 90 percent of all small businesses are under $1,000,000 in annual sales so someone needs to pay attention to this group. The overwhelming news revolves around bigger businesses even though percentages say, the vast majority of US businesses are small. The Wall Street Journal estimates roughly 70% of existing small businesses will change hands in the next decade. The creation of wealth and transfer of business ownership will be exciting if banks can get their act together and start responsibly lending capital.

  2. Only 56% of businesses making between $250K-$750K have websites? This seems exceptionally low to me given how affordable a basic website is to set up and maintain. This seems unforgivable to me in today’s wired world.

  3. Thanks for sharing all of this great data with the Small Business Trends community.

    Parts of the Verizon study were hilarious-thanks for sharing the funny stuff, too.

    The jobs figures are very discouraging. The employment rate just doesn’t seem to be getting better.

    I hope that the US economy doesn’t start going backwards. It’s starting to feel that way.

    The Franchise King

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