As part of the ritual of examining local commerce and SMB SaaS strategies, Localogy goes right to the source: SMBs themselves. How do they feel about marketing and operational software? What features do they want? And how has their hunger changed in a pandemic? This is all a moving target.
Localogy’s Modern Commerce Monitor (MCM) answers these website dynamics questions across SMB SaaS, which we preview in this Benchmark Bytes series. After examining SMBs’ sentiments on working with vertically-specialized software providers, we switch gears to look at their retirement dynamics.
Specifically, how well do SMBs plan for retirement? Do they have deliberate succession plans for their businesses or simply close up shop? And for those who plan carefully, do they take steps to seek out advice from knowledge experts? All the above is a key dynamic for SMBs, though it’s rarely discussed.
Localogy members can access full charts and SMB survey reports. Non-members can purchase reports.
Data Dive
Going deeper, a few insights jump out from these findings.
– First, a majority (57 percent) plan for their retirement in terms of what they will do with their businesses when they themselves retire.
– Though this is a majority of the survey sample, it’s a thin majority, meaning that a sizable segment of SMBs doesn’t plan for retirement.
– These results are somewhat surprising, given a large portion of SMBs (43 percent) aren’t actively planning for the retirement or succession of their business.
– The concept of SMBs closing up shop permanently is top of mind, as many were forced into early retirement in the Covid era.
– As we recently examined, the pandemic simply pushed up their retirement date, as many SMBs simply didn’t re-open.
– One effect of this is an accelerated phasing out of older businesses.
– That turnover cycle has in turn transformed the face of the SMB landscape, as it lowered the average age of SMBs.
– How are these younger SMBs characterized (younger in terms of business age and biological age of proprietor)?
– Many are more digitally savvy as digital natives Yelp’s Chad Richard tells us.
– Many of these younger businesses that launched during the pandemic (sometimes taking the place of older/retiring businesses), is that they’re fire-tested in terms of their operational excellence and marketing practices.
– The result will be that the bar is raised when it comes to competition among SMBs and digital marketing savvy.
–Join us for Localogy 2023, when we’ll break down these SMB dynamics in a panel discussion with Richard and others.
Time to Shine
Stepping back, SMB online marketing – website-based or otherwise – continues to grow rapidly. SMB SaaS startups and online services providers are correspondingly thriving as it continues to grow as a leading subsector of the broader SaaS universe. There’s a long-tail opportunity at play.
Meanwhile, new SMB SaaS users could represent permanent adopters. This is a concept that’s accelerated in the Covid era as SMBs are forced to boost their digital transformation. This sends them into the arms of SaaS providers to accomplish a range of marketing and operational functions.
We’ll return in the next installment to go deeper into Localogy original survey research. That will include SMB goals and success factors. Let us know what additional insights jump out at you from the above data. Stay tuned for more breakdowns in our Benchmark Bytes series.
