State of the Business Owner Key Findings Webinar

State of the Business Owner 2012
The Planner and the Pessimist

Key Findings Webinar
June 6, 2012

Presented by:
Cameron Madill, President and Founder, Synotac
Jonathan Raymond, CEO, EMyth

333 SW Fifth Avenue, Suite 350 | Portland, OR 97204 | 800-620-0307 | www.synotac.com
© Synotac Design, LLC 2012

Presenters
Cameron Madill Jonathan Raymond

President, Synotac CEO, EMyth

For Guides & Additional Resources
www.stateoftheowner.com

Webinar Questions & Comments

Twitter Hashtag: #sobo2012

Webinar questions feature


Origins and Motivation

What are the success factors helping
small and midsize businesses
succeed in 2012?


Faulty Logic in Business

People who have just run a marathon sweat a lot

You are sweating a lot

Therefore, you have just run a marathon


The Business Book Formula

My favorite business tactic is _____

The most successful company in the world
today, Apple, uses this business tactic

Therefore, my favorite business tactic will
help ANY company to grow and thrive


We Are Not Fortune 500 Companies
There is little good research on how small and midsize
businesses thrive


Boring & Important - Methodology
● 802 business owners responded to a 55-question
survey in early 2012

● Respondents came from 47 different countries, with
over 90% coming from six English-speaking countries:
USA, Canada, UK, South Africa, Australia and NZ


The Data at a Glance
● The median age was 46 with respondents ranging from
20 to 90

● Combined revenues exceeded $600 million, with the
average compensation of $104,000 and revenues of
1.4 million.

● The median growth rate was 13% with expected 2012
growth of 16%

● All currency figures converted to US dollars

● Only statistically significant findings are reported


The Planner and The Pessimist
Business owners were starkly divided into two groups:

Planners Pessimists


The Planner
Planners believe they control their destiny and are busy
navigating towards their vision for the future of their
business.

Qualities of a Planner
● Have a coherent vision of the future
● Regularly track business metrics
● Have concrete plans to move
towards their business vision
● Are innovative with technology


The Pessimist
Pessimists believe the future is dictated by external events
beyond their control that limit them from creating the life
they want.

Qualities of a Pessimist
● Do not have a vision for their
company in the future
● Have few or no formal plans for
making progress towards this vision
● Do not regularly consult metrics to
track business progress


So Who Cares?
Businesses that were owned by Planners:

Grew faster in 2011
Had higher annual revenues
Were more optimistic about 2012
The owners took home more compensation


Which one are you?

Planners Pessimists


The Way to a Business Owner's Heart

Composite of responses to "What is your biggest opportunity in 2012?" and "What is your biggest challenge in 2012?"


What Helped Companies
Grow in 2011?


The Three Keys to the Growth Engine

Fundamentals Accelerators People




KEY #1 - FUNDAMENTALS


KEY #1
FUNDAMENTALS


The Recipe for Success

We found that businesses that thrived
in 2011 followed a simple formula:

Vision + Plans + Data = Success



Vision + Plans + Data = Success



Vision
Only 42% of all businesses had a written description of
what they want their business to look like in the future.



Plans
The greater the extent of revenue planning, the more
successful businesses were in 2011 and the more
optimistic they were about 2012



Bowling Blind

What would happen if you
had to run your business
without any feedback on the
results you were achieving?



Data
65% track business metrics at least
monthly

66% use their P&L and Balance
Sheet to make decisions

43% quantify their lead generation
efforts

39% monitor web traffic regularly



Data
Businesses that tracked business
metrics monthly were 80% larger
and earned 60% more than their
peers

Businesses that use financial
statements to make decisions were
45% larger and earned 60% more
than their peers



What Will The Economy Do in 2012?



Optimism and Planners



Optimism and Experience





KEY #2 - ACCELERATORS


KEY #2
ACCELERATORS


Accelerators
Once you have the fundamentals in place, there were two
primary areas we found that could be used to accelerate
your progress towards your vision:

● Technology
● Marketing



Technology and Disruption
When asked about the biggest trend affecting their
business in the next three years, business owners
consistently cited technology and the internet as drivers for
change in their businesses, good and bad.



Technology and Disruption

“Consumers becoming increasingly web based”
- 33 year old male, Australia

“Technology making the world a smaller place”
- 42 year old female, Professional Services, United States“

Disintermediation due to the internet”
- 49 year old male, Professional Services, South Africa



Optimism and Technology



Before A Prospect Arrives
41% of businesses monitor their reputation online by
observing what their customers and employees are saying



Impact of Your Reputation Online

80% - Negative information online has made me change
my mind about purchasing a product or service

87% - Positive information online has reinforced my
decision to purchase a product or service
Source: MarketingPilgrim.com



What's Your Real Homepage?



Highly Effective Marketing
After referrals, websites were the only type of marketing
rated highly effective by more than half of the respondents.



Hubs and Spokes

"Marketers are increasingly viewing their websites as the
hub around which all their marketing efforts revolve, rather
than just another spoke."
MarketingSherpa



The New Buying Process

77% of B2B buyers said they did not engage with a sales
rep until after internal research was conducted, and 36% of
buyers said they did not engage with a salesperson until
after a preferred list of vendors was established.
Source: DemandGen



Educational Marketing



Marketing and Planning



The Target
Have you defined the key
characteristics of your target market?

65% - Yes
35% - No



The Target



Marketing and Planners
Do you have a marketing plan that you
revisit at least quarterly to evaluate
results?

35% - Yes
65% - No



Marketing and Planners



Digital Analytics
Businesses that monitor their lead generation and website
analytics outperformed those that did not:

● They Grew 20% faster in 2011
● They Are twice as optimistic about 2012
● They Generated 30% more revenue overall
● They Took home 20% more compensation





KEY #3 - PEOPLE


KEY #3
PEOPLE


People
There were two major groups inside of your business that
determined success:

● Your Employees
● YOU (business owners)

KEY #3 - PEOPLE


Labor Mobility

Standard "quit" rate in any year: 25%
In 2010: 16%
Source: U.S. Bureau of Labor Statistics

KEY #3 - PEOPLE


Employee Engagement
Engaged - work with passion and feel a profound
connection to their company

Not Engaged - essentially “checked out” and sleepwalking
through their workday

Actively Disengaged - acting out their unhappiness and
undermining the mission of the company
Source: Gallup

KEY #3 - PEOPLE


November 2011 Gallup Q12 Results

KEY #3 - PEOPLE


How do you Retain Star Employees?
“Honesty, fair treatment, fair compensation, clear
communication.”
- 50 year old female, United States

“Mentoring, flex work schedule, encouraging ongoing
education.”
- 36 year old male, Technology Services, United States

KEY #3 - PEOPLE


How do you Retain Top Employees?
Recognition

Professional Growth Opportunities

Clear Expectations

Trust and Autonomy

Fair Compensation

KEY #3 - PEOPLE


So What Are You Doing About It?

KEY #3 - PEOPLE


Results-oriented Role Descriptions
Only 30% of all businesses had results-oriented role
descriptions for all of their employees.

KEY #3 - PEOPLE


Vacation and Ownership

KEY #3 - PEOPLE


Business Owners
We could find no relationship between growth rates
and amount of vacation by the business owner.

KEY #3 - PEOPLE


Gender and Business Ownership
There were substantial differences in compensation and
business size between male and female business owners.

KEY #3 - PEOPLE


The Partner Factor
Business owners with a partner outperformed those without
a partner in every area we measured.

KEY #3 - PEOPLE


The Business Model Matters
Business owners who had a relationship-driven model took
home substantially more compensation than transactional
companies.

KEY #3 - PEOPLE


State of the Business Owner 2012
For additional research, guides and community:


Facebook.com/StateOfTheOwner

@StateOfTheOwner


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