In the most recent edition of the Small Business Success Index™ (SBSI), the core theme and finding of the report, in its third edition, is centered around “Creativity as a strategy for success”. This third wave of the report, sponsored by Network Solutions® and the Center for Excellence in Service at the University of Maryland’s Smith School of Business also reported that social media adoption by small businesses has doubled from 12 percent to 24 percent in the last year.
For a more in-depth look at the social media findings, there is a great post on Small Business Social Media Adoption Doubles in 2009 at GrowSmartBusiness.com.
Highlights on Small Business Creativity Strategy
From the report, the executive summary mentions how “Small businesses are highly successful in getting referrals from existing customers, but struggle to be creative and differentiate themselves.” The major ways that small businesses differentiate themselves from competitors are:
- Superior customer service (78 percent)
- Higher quality products and services (76 percent)
- Creative ideas to address customers’ needs (65 percent)
- Lower prices (44 percent)
Among these four areas of differentiation, superior service and creativity are correlated with competitive success, while quality and low prices make little difference to small business success. Perhaps everyone claims to have high quality, making it a marginal strategy for differentiation, while cutting prices is not sustainable for small enterprises that lack the economies of scale to keep costs low.
Being creative is a success strategy for differentiation, but where do small businesses get new ideas for how to grow? The most common source is customers (68 percent). Other popular sources include:
- Newsletters and trade journals (52 percent)
- Competitors (50 percent)
- Employees (45 percent)
- Suppliers (41 percent)
- Conferences (38 percent)
- Books (37 percent)
Still, there are challenges for small businesses
From the introduction in the report “The SBSI ranges from 0 to 100, and is currently 75, which can be viewed as a “solid C”. This level is unchanged from a year ago, and other data reported here suggest that the prolonged recession has restrained the ability of small businesses to improve their situation. While the overall numbers are largely unchanged, small shifts are occurring on selective indicators of success. For example, small businesses feel more successful in getting their customers to help find new business for them and in keeping their staff productive. It would seem that customers and employees alike are doing their best to help small businesses deal with tough times. This wave of the SBSI provides considerable detail on how the economy is affecting small businesses and how they are responding.”
The report goes on to note “a major obstacle small businesses face today is in the highly important area of capital access, which consists of a small business’ ability to meet short and long range financial needs. The report for this wave sheds light on this problem, with details and trends on how small businesses finance their needs and how the capital crunch affects owners personally. This wave of the SBSI also provides depth on other issues and opportunities for small businesses, including the triggers of entrepreneurship, where small businesses get new ideas, the rise of social media as a marketing and management tool, and the global reach of small enterprises.”
To read the rest of the report and download a copy of the Small Business Success Index and also find out how your business scores on the six key dimensions of small business success, visit www.growsmartbusiness.com.Google+