3 Things You Should Know About Small Business: May 4
NEW YORK ( MainStreet) -- What's happening in small business today?
1.Census data shows the U.S. business startup rate fell below 8%. The nation's business startup rate fell below 8% for the first time in 2010, the most current year of data available, marking the lowest point on record for business launches.
New firms -- as a percentage of all firms -- continued a steady downward trend in 2010, going from a high of 13% in the 1980s to just under 11% in 2006 before making a steep decline to 8% in 2010, according to U.S. Census Data analyzed by the Ewing Marion Kauffman Foundation .
The reduced numbers of new firms means fewer job created by small businesses. From March 2009 to March 2010, U.S. private-sector firms created a net negative 1.8 million jobs. The 394,000 companies that began operations in 2010, however, created 2.3 million jobs, in spite of the anemic economy, Kauffman says.
Young firms -- those five years old or younger -- now comprise less than 35% of all firms, down from nearly 50% in the early 1980s.
Startup decline was seen in all states, although some fared better than others. While the report does not break out state-by-state formation, those that experienced the largest declines were primarily those in which young businesses had the highest new business activity in the 1980s. These states typically were in the West, Southwest and South -- the regions hit hardest by the recent recession.
2. What to do if you have two different customer demographics? Denise Lee Yohn, QSR Magazine's marketing expert, shares tips on how to appeal to two very different, but profitable, demographics, after a reader asked Yohn how to brand his year-round "rock bar and restaurant" so that it would also appeal to families that go to the seasonal amusement park across the street.
While Yohn typically recommends against it, because it presents too many challenges, she offered two options: "craft an overarching brand platform that works for both audiences and tailor messaging to each, or use a linked brand to create separate brand identities for each part of your business," she writes.
The first option requires a brand platform that is "elastic enough" to stretch across both types of experiences offered, playing up common elements, such as food types, a friendly staff, etc. Then tailor the messaging of that brand and the correlating marketing to individual audiences, emphasizing what's most relevant to them, she writes.
The second option is to create a second sub-brand to distinguish between the two audiences. "For example, Hallmark created Shoebox and endorsed it by using the descriptor 'A tiny little division of Hallmark.' It wanted to designate the irreverent, edgy humor of Shoebox greeting cards as different from the Hallmark brand, but it also wanted to leverage the awareness and equity of the Hallmark brand. Two product lines, two personalities, two target audiences -- different but related," Yohn writes.