Small business owners contribute to job creation and innovation in many industries, and are often referred to as “the backbone of America’s economy.”
By definition, a “small business” is one with fewer than 500 employees and annual receipts of less that $7.5 million. According to the Small Business Administration, there are currently over 33 million small businesses in the United States alone, which employ 61.7 million people.
In this blog, we'll explore some key information about the owners of these small businesses, including their demographics and values, psychographic data, preferred media channels, and their buying behavior.
/// Demographic Information
As a group, small business owners tend to be older White males. 51% of small business owners are 55 years old or older while 80% are white, and 63% are male. Of the 20% of small business owned by people of color, only Asians are overrepresented in this audience, owning 11% of small business while making up only 6% of the population.
Small business owners are also more educated and more affluent than average. They are likely to have a Bachelor’s degree or better, and have an average household income 25% higher than the median U.S. household. Although nearly 82% of small businesses have no employees, roughly 15% of small business owners with employees have a net worth of $1M or higher, more than 2x higher than the average U.S. population.
/// Personal Values
Small business owners are more likely to be motivated by the pursuit of self-enhancement. They tend to be driven by a desire for authority, achievement, and influence. They strive for social and professional status, creativity, and recognition from their peers and are more likely to be decisive and direct, ambitious and determined, and may place more emphasis on preserving their public image.
/// Psychographic Information
Small business owners tend to be driven, passionate, and entrepreneurial. They are often willing to take risks to achieve success. They are also typically self-motivated and hardworking, and motivated by a variety of factors, including a desire for independence, a passion for their work, and a drive to make a positive impact on their community. Let's explore these motivations in more detail:
Many small business owners start their own businesses to be their own bosses and have control over their work. This independence allows them to pursue their goals and create their own vision for their business.
Small business owners also value the flexibility that comes with owning a business, as it allows them to set their own schedule and work on projects they enjoy.
Passion for Their Work
Many small business owners start their businesses because they are passionate about a particular product or service, and they want to share that passion with others. This passion often drives them to put in long hours and work tirelessly to create the best possible product or service for their customers.
Small business owners often find immense satisfaction in their work both personally and professionally, and find immense satisfaction in having their business be a vehicle for their creativity.
Desire to Make a Positive Impact on Their Community
Small businesses are often seen as the backbone of local economies, and 26% of small business owners recognize the importance of supporting their community, with a desire to help the community being their primary reason for starting a business. They may prioritize using local suppliers, hiring local employees, and supporting local charities and events.
This community involvement allows small business owners to create a sense of connection and belonging with their customers and employees, while also giving back to the community that supports them.
/// Preferred Media Channels
Small business owners’ preferred media channel is the Internet and they are likely to consume business information across online video and mobile apps. They are technologically adept and consider themselves first adopters, willing to pay full price for the latest gadgets.
Small business owners are also active on social media, as it provides an opportunity to connect with customers and promote their products and services. LinkedIn is the platform of choice for networking with others but they also utilize social media for business and ecommerce.
Although this audience underindexes for TV consumption, they overindex for consumption of sports and entertainment programming within this channel, being active watchers of channels like MLB Network and NBA TV as well as streaming platforms like AMC+, ESPN+, and Showtime. Top programs include The Espy Awards, ESPN Sunday Night Football, and the MTV Video Music Awards.
Small business owners are also heavy consumers of audio channels like radio and podcast. On radio, this audience is most likely to listen to Comedy, Sports Talk, and News Talk. On podcasts, this audience is most likely to listen to Business podcasts as well as those related to Health and Fitness and Music.
In terms of print, although a medium with less overall consumption overall, the small business audience is 3x more likely to read newspapers and nearly 4x more likely to read magazines than the average U.S. consumer. Business and technology publications lead magazine readership, with Fortune, Forbes, and Popular Science indexing highly.
Small business owners play a crucial role in America's economy as they contribute to job creation and innovation. These driven, passionate, and entrepreneurial individuals prioritize independence, a passion for their work, and a desire to make a positive impact on their communities. Understanding their demographics, values, and channel preferences is vital to reaching them with messaging that is compelling and informative.