On an annual basis, The Business Journals gathers data from a national sample of small and mid-size business owners to compile key learnings and insights into the state of the SMB market. Within the proprietary report, we're sharing the big picture, new and notable market shifts, purchase dynamic themes and the most trusted brands.

1. THE BUSINESS
JOURNALS
A DIVISION OF ACBJ
INSIGHTS
2016
MS B
A MARKET IN TRANSITION
The 14th Annual, Nationally Representative!

2. EXECUTIVE SUMMARY
2
THE BUSINESS
JOURNALS
A DIVISION OF ACBJ
1 Women & Minority-owned businesses are increasing substantially
2 Millennial numbers are surging; they will become the business owners of the
future
3 Economic concerns increase, impacting both confidence and sales growth
4 The presidential outcome & its business impact are top of mind
5 The skills shortage is gaining momentum
6 New order of the day: “work-life blend”
7 70 is the new 60
8 Environmental consciousness has awakened
9 Mobility products & applications gaining greater depth of usage
10 Brand TRUST…a strategic imperative

3. 3
INSIGHTS2016
MS B
THE BIG PICTURE
FOLLOWED BY: • SMB SNAPSHOT!
• NEW & NOTABLE SHIFTS !
• PURCHASE DYNAMIC THEMES!
• BUSINESS OF BRANDS!

4. Sole
Proprietors
1-4
5-19
20-49
50-99
100-999
SMALL & MID-SIZED COMPANIES
NUMBER 7.6M
4
THE BUSINESS
JOURNALS
A DIVISION OF ACBJ
23.2M
4.11M
2.38M
670K
228K
173K
7.6M Businesses
(Without Sole Proprietors)
Source: Small Business Research Center, based on Census and Bureau of Labor Statistics data; Q4 2015 projection

5. GROWTH IN THE NUMBER OF
BUSINESSES IS GREATEST AMONG
LARGER COMPANIES
5
THE BUSINESS
JOURNALS
A DIVISION OF ACBJ
0.64%
0.35%
0.61%
2.05%
1.65%
1.73%
Sole
Proprietors
Under 5
Employees
5-19
Employees
20-49
Employees
50-99
Employees
100-999
Employees
Growth in Number of SMB Businesses
2015 Versus 2014
Source: Small Business Research Center, based on Census and Bureau of Labor Statistics data; Q4 2015 projection

6. THE NUMBER OF WOMEN & MINORITY
OWNED BUSINESSES HAS INCREASED
SUBSTANTIALLY
6
7.8
9.9
12.5
2.3
3.3
4.8
5.6
7.9
10.9
2007 2012 2017 (projected)
Women-Owned Hispanic-Owned Minority-Owned
Number of Women, Hispanic and Minority-Owned Businesses
(In Millions)
Source: US Census Bureau, Survey of Business Owners (2012 data published 8/18/15); Base: All US Non-farm businesses operating in the 50 states and District of
Columbia. NOTE: 2017 projected using 2012 vs. 2007 growth rates. Minority-Owned businesses include Black/African American, American Indian, Asian, Asian Indian,
Chinese, Filipino, Japanese, Korean, Vietnamese, Native Hawaii and other Pacific Islanders.
THE BUSINESS
JOURNALS
A DIVISION OF ACBJ
(39%)
(56%)
(Women-Owned, 36%
of all US firms)
(Hispanic & Minority-Owned, 41%
of all US firms)
Projection:

7. MILLENNIALS ACCOUNT FOR 16% OF
SMB OWNERS & ARE THE LARGEST
LABOR FORCE
7
Millennials’ Share of SMB Business Owners & Employees
Source: U.S. Small Business Administration, Office of Advocacy, from the US Census Bureau, Survey of Income & Program Participation (SIPP); Issue Brief
#6, Demographic Characteristics of Business Owners, 2013. Note: Businesses with under 500 employees, includes sole proprietors.
THE BUSINESS
JOURNALS
A DIVISION OF ACBJ
16%
38%
33% 32%
52%
29%
Business Owners Employees
Millennials, Under 35 Gen X, 35-49 Boomers, 50+

8. 8
78%
56%
32%
35%
52%
65%
77% 77% 76%
73% 73%
81%
78%
Jan 08 Aug 08 Oct 08 Mar 09 Aug 09 Nov 09 Dec 09 Dec 10 Dec 11 Dec 12 Jan 14 Jan 15 Jan 16
Optimism and Confidence in Future Business Prospects
“How do you think your company’s prospects will change over the next 12 months? By prospects, we mean the general success of your
business.” (2008-2013) “What is your level of confidence in the success of your company (based on revenue, profitability & growth) over the next 24
months?” (2014-2016)
THE BUSINESS
JOURNALS
A DIVISION OF ACBJ
BUSINESS CONFIDENCE IS SLIGHTLY
DOWN VERSUS YEAR AGO AMONG SMBs

9. SMB SALES GROWTH HAS REMAINED
FLAT OVER THE PAST YEAR
9
37%
27%
21% 24% 26% 29% 31%
36% 33%
37%
34%
21%
20%
24%
30%
34%
35% 37%
2007 2008 2009 2010 2011 2012 2013 2014 2015
1-10% Sales Growth 11%+ Sales Growth
SMB Owners Experiencing Sales Growth
THE BUSINESS
JOURNALS
A DIVISION OF ACBJ
74%
42%
71% 70%
61%
44%
50%
59%
65%
Actual Year
“What would you estimate your company’s average, annual percentage sales growth rate has been over the last three years, that is on a
per year basis, from 2013 through 2015?

10. KEY CHARACTERISTICS OF SMALL
AND MID-SIZED BUSINESS OWNERS
10
68% men | 32% women
$185K household income (average)
52.8 average age
74% married; 30% kids at home
68% college graduates+
$8.5M annual sales (average)
28.5 years in operation (average)
25 employees (average)
THE BUSINESS
JOURNALS
A DIVISION OF ACBJ

11. SMB OWNERS RUN COMPANIES THAT
ENCOMPASS AN ARRAY OF BUSINESS
LIFE STAGES
11
Start Ups
3%
Growing
29%
Maturing
36%
Re-inventing
15%
Surviving
12%
Declining
2%
Transitioning
3%
“Which of the following best represents the business phase your company will be in for the next 3-5 years? Start Ups, Maturing, Re-inventing, Surviving (business is under
pressure because of the economy, competition, and/or decreased sales/customers/credit), Declining (closing or preparing to close the company), Transitioning (selling or
otherwise exiting the business).”
THE BUSINESS
JOURNALS
A DIVISION OF ACBJ
Increasing sales,
employees, locations or
knowledge
Settled, established,
stable, business is steady
Re-defining the business, or finding
a specific niche in the market either
from personal desire, or out of
necessity to stay competitive &
profitable
Recently started the
business, still learning,
getting things in place
Current Business Life Stage

12. SMBs ARE MOST ENGAGED IN WHITE
COLLAR INDUSTRIES, ESPECIALLY
SERVICES
12
1% 1%
8%
13%
4% 3%
7%
12%
9%
37%
1%
5%
Total SMB Owners
Any White Collar
Services
37%
Misc business services 11
Engineering, management
services
8
Amusement recreation 3
Health services 3
Miscellaneous services 3
Personal services 2
Social services 2
Hotel, recreational lodging 1
Legal services 1
Educational services 1
Membership organizations 1
Blue Collar 30% | White Collar 65
SMB Industries
THE BUSINESS
JOURNALS
A DIVISION OF ACBJ
*FIRE = Financial, insurance and real estate

13. SMB OWNERS THINK & ACT LOCALLY
13
THE BUSINESS
JOURNALS
A DIVISION OF ACBJ
% Generating Sales:
Locally 92%
Nationally 61
Internationally 24
58%
63%
64%
70%
Our company lives or dies by
how much business it
generates locally
Marketing/selling directly to the
local community is a key
component of our co's success
Our company is actively
involved in the local community
to promote good will & generate
business
First & foremost our co tries to
do business with other local
companies
% Agree
“Following are a series of statements which may/may not reflect how you think about business, or life in general. Please indicate whether you agree/disagree
with each one, using a 0-to-10 scale, where 10 means you ‘strongly agree’ and 0 means you ’strongly disagree.’ Using 100 % points, how would you break down
your co’s 2015 sales among the following three geographic categories? ...Within your local area, The rest of the U.S., Outside of the U.S.”

14. 14
INSIGHTS
2016 MS B
NEW & NOTABLE

15. THE U.S. ECONOMY HAS RE-SURFACED
AS A TOP CONCERN AMONG SMB
OWNERS
15
1! Cost of health insurance & other employee
benefits (rank 2015 #1)!
2! Being able to attract customers (#2)!
3! The U.S. economy (#8)!
4! Rising costs of doing business (#5)!
5! Maintaining our existing customer base (#3)!
THE BUSINESS
JOURNALS
A DIVISION OF ACBJ
“What are the issues that you’re most concerned about related to running a business?”
Today’s Top Concerns

16. REPUBLICANS ARE WORRIED ABOUT
THE UPCOMING PRESIDENTIAL
ELECTION & ITS IMPACT ON BUSINESS
16
33% 31%
42%
30%
37%
31%
38%
51%
21%
31%
38%
38%
Total SMBs Republicans Democrats Independents Women Men
Very
Concerned
Somewhat
Concerned
69%
61%63%
82%
71%
75%
Concern About the Outcome of the Upcoming
Presidential Election on Your Business
THE BUSINESS
JOURNALS
A DIVISION OF ACBJ
“What are the issues that you’re most concerned about related to running a business?”

17. WITH DECREASED UNEMPLOYMENT
RATES, THE SKILLS SHORTAGE HAS
INCREASED AS AN ISSUE
17
5.1%
4.6% 4.6%
5.8%
9.3%
8.1%
5.5%
4.9%
Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 13 Jan 15 Jan 16
Unemployment Rate
THE BUSINESS
JOURNALS
A DIVISION OF ACBJ
50%
58%
Jan 15 Jan 16
It is Difficult to Find New Employees
with the Skills & Education to Meet the
Needs of Our Business
(Strongly Agree)
Unemployment rates sourced from the Bureau of Labor Statistics
“Following are a series of statements which may/may not reflect how you think about business, or life in general. Please indicate whether you agree/disagree
with each one, using a 0-to-10 scale, where 10 means you ‘strongly agree’ and 0 means you ’strongly disagree.”

18. 50%
40%
38%
37% 37% 38%
25%
28%
37%
52%
75%
74%
2007 2009 2011 2013 2015 2016
SMARTPHONES HAVE LESSENED TIME
CONCERNS RESULTING IN A NEW TYPE
OF ‘WORK-LIFE BLEND’
18
“Which of the following products or services have you used in the past year for your business?” “What are the issues that you’re most concerned about
related to running a business?”
Very Concerned about
Demands on Your Time
Use SmartPhone
for Business
THE BUSINESS
JOURNALS
A DIVISION OF ACBJ

19. PLANNED SMB RETIREMENTS ARE
BEING PUT OFF; 70 IS THE NEW 60
19
3%
6%
8%
24%
26%
32%
64%
69%
Don't know who would
sell/transfer business to
Want to try a different
career
Want to start another
business
Need money to make ends
meet
Keep health insurance/
other benefits
Want money to buy extras
Enjoy working
Want to stay active &
involved
THE BUSINESS
JOURNALS
A DIVISION OF ACBJ
Under 60
12%
60-64
19%
65
12%
66-69
25%
70+
19%
Never
13%
Planned Retirement Age
Over 65
57%
65 or Younger
43%
Reasons to Continue Working
“At what age are you expecting to retire?” “What are your reasons for wanting to continue working later in life? Please select all that apply.”

20. 54%
46% 46%
47%
50%
40% 40%
41%
48%
47%
46%
52%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
ENVIRONMENTALLY NOT CONSCIOUS
Our company respects ‘green’
values & is conscious of the
environment
Environmental Issues … Agree Strongly
SUSTAINABILITY EFFORTS &
ENVIRONMENTAL CONCERNS ARE ON
THE RISE AMONG SMBs
THE BUSINESS
JOURNALS
A DIVISION OF ACBJ
20
Businesses today have a
responsibility to address key
social & environmental
issues
Working to make
‘sustainability’ an integral
part of our products/services
“Following are a series of statements which may/may not reflect how you think about business, or life in general. Please indicate whether you agree/disagree
with each one, using a 0-to-10 scale, where 10 means you ‘strongly agree’ and 0 means you ’strongly disagree.’

21. SMARTPHONE USAGE IS GAINING
DEPTH AMONG SMB OWNERS
21
“In lieu of of paper, I often use my SmartPhone for boarding
passes, tickets, other payments and receipts”
“How much do you agree or disagree with each of the following statements about technology?” “What percentage of your total weekly time taking in business
news or information is accessed via smartphone, tablet, computer or a print publication itself?” “For each social network, please click whether it is used for
business purposes, personal reasons or both.”
THE BUSINESS
JOURNALS
A DIVISION OF ACBJ
% Agree Completely/Mostly
Use SmartPhone to Access Business
News/Information
57%
75%
2015 2016
53%
44%
25%
10%
Facebook LinkedIn Twitter Instagram
Use for Business Purposes
33%
44%
2014 2016

22. MOBILITY PRODUCTS BRING REVENUE
AND INCREASED PRODUCTIVITY TO
SMBs
22
THE BUSINESS
JOURNALS
A DIVISION OF ACBJ
Top Three Values Mobility Products & Service
Provide the Business
18%
30%
32%
44%
48%
55%
73%
Decrease IT costs
Gain competitive advantage
Higher employee satisfaction
Improve/maintain existing competitive
advantage
Improve field service operations
Increase sales/revenue
Increase employee productivity
“Please rank the top three values that mobility products and services provide for your organization.”

23. SMBs WILL CONTINUE TO LEVERAGE
TRADITIONAL MEDIA WHILE ADOPTING
NEW CHANNELS – IT’S ADDITIVE
23
31%
24%
19%
21%
18% 19%
16%
13%
9% 9%
4% 5%
7%
3%
35%
28%
25% 25%
23%
20%
18%
12% 11%
9% 9%
7% 6%
3%
2015 2016
“Which of the following will your company use more of in the next 1-2 years?”
Marketing and Advertising Vehicles Plan to Use More of
Next 1-2 Years
THE BUSINESS
JOURNALS
A DIVISION OF ACBJ

24. 24
INSIGHTS
2016 MS B
PURCHASE DYNAMICS

25. “We would like to get your overall impressions of several major industries in the US. For each, please give your overall view of it.”
Very/Somewhat Positive
19%
20%
20%
17%
54%
28%
71%
26%
44%
44%
46%
50%
58%
73%
Health Insurance
Banking
Credit Cards
Financial, Investment
Telecom
Travel
Technology Hardware
2016
2009
THE BUSINESS
JOURNALS
A DIVISION OF ACBJ
INDUSTRY PERCEPTIONS HAVE
REBOUNDED VS. THE RECESSIONARY
LOWS OF 2009
25

26. THE MAJORITY OF SMB OWNERS
WILL BE MAKING BRAND/VENDOR
CHANGES IN THE NEXT TWO YEARS
26
Making
Changes
61%
Not Making
Changes
39%
Health Insurance! 40%!
Technology hardware (computers, mobile
devices, peripherals)!
36!
Business software! 30!
Marketing (marketing/media buying co’s,
social media co’s, email marketing co’s,
PR firms)!
24!
Telecom services providers & carriers
(cable, phones, internet, cloud providers)!
24!
Banking! 19!
Property & Casualty insurance! 17!
Office supplies! 17!
Financial / investment! 15!
“For which of the following industries will your company be changing or adding brands/vendors in the next two years?”
THE BUSINESS
JOURNALS
A DIVISION OF ACBJ

27. 31%
52%
48%
36%
47%
42%
32%
49%
31%
37%
48%
40%
49%
58%
Marketing
Travel
Business Services
Insurance
Financial
Telecom
Technology
Make Decision Yourself Seek Advice From Others
90%
87%
84%
84%
83%
80%
90%
Decision Making Across CategoriesSMB OWNERS DRIVE BRAND CHOICE
ACROSS MULTIPLE LINES OF
BUSINESS
THE BUSINESS
JOURNALS
A DIVISION OF ACBJ
27
“Your company undoubtedly interacts with and uses the service of many industries. Please indicate how vendor and brand decisions
are made by your company for each industry listed below.”

28. SOURCES OF ADVICE VARY BY
INDUSTRY…PEERS & COLLEAGUES
ARE OFTEN CONSULTED
36%
34% 34%
29%
35%
41% 41%
30% 29%
21%
19%
28%
21%
25%
19%
21%
29%
22%
20%
22% 23%
26%
19%
16%
37%
12% 11%
20%
Technology Telecom Financial Insurance Business
Services
Travel Marketing
Business Colleagues/Peers In-house Expert/Dept Head Other Owner/Partner Outside Consultant
THE BUSINESS
JOURNALS
A DIVISION OF ACBJ
28
Expert/Dept Head
Other Owner/Partner
Consultant
“Listed below are the industries in which you mentioned seeking the advice from others before a final decision is made. For each industry, please
indicate the specific sources of that advice.”

29. TRUST IS A CRUCIAL COMPONENT OF
THE BRAND SELECTION PROCESS
29
27%
29%
33%
35%
38%
40%
57%
60%
Offers cutting edge solutions
Works with our co's business partners/
consultants
Recommended by peers in industry
A co/brand have worked with in past
Is well known & respected
Provides a special offer/good pricing
Proven track record of strong
customer service/support
Is a brand or company I trust
% Rating Extremely
Important
Important Criteria When Selecting a
Brand or Vendor
THE BUSINESS
JOURNALS
A DIVISION OF ACBJ
“How important are each of the following criteria when deciding which brand or vendors to consider?”

30. 30
INSIGHTS
2016 MS B
BUSINESS OF BRANDS

31. BRAND EVALUATION CRITERIA
31
KEY
MEASURES
Leadership!
Differentiation!
Value!
Ethics!
Customer Service!
Momentum!
Relevance!

32. 6
7
8
9
10
1
2
3
4
5
TOP TEN BRANDS
32
Business
Credit Card

33. EIGHT NEW BRANDS ENTERED INTO
THE TOP 25 IN 2016
33
THE BUSINESS
JOURNALS
A DIVISION OF ACBJ
Vs. 2015
3 1 Amazon.com
1 2 Apple
2 3 Southwest
4 4 Google
14 5 Dropbox.com
22 6 Visa
33 7 Square
18 8 Visa Business Credit Card
5 9 Citrix GoToMeeting
7 10 Samsung
6 11 UPS
10 12 Microsoft
30 13 Vanguard
Vs. 2015
21 14 Intel
46 15 DoubleTree by Hilton
9 16 FedEx
37 17 Hilton
26 18 Courtyard by Marriott
19 19 FedEx Office
8 20 Adobe
27 21 American Express
OPEN
16 22 The UPS Store
13 23 LG
28 24 JetBlue
40 25 GEICO
Based on the same set brand list for 2016 versus 2015. Products are not included in the overall brand ratings.

34. ABOUT THE BUSINESS JOURNALS
34
For more than three decades, American City Business Journals has been the nation’s largest
publisher of local business news and information in print and online, deploying more than 600
journalists across 43 major U.S. cities. ACBJ serves audiences valuable news and data
anytime and anywhere they seek it.
THE BUSINESS
JOURNALS
A DIVISION OF ACBJ
Research:
Jessie Shaw
212-500-0611
jessieshaw@bizjournals.com
Local Advertising:
Alex Orfinger, EVP
703-258-0888
aorfinger@bizjournals.com
Mike Olivieri, EVP
704-973-1005
molivieri@bizjournals.com
National Advertising:
Ryan Whittington, SVP
704-973-1839
rwhittington@bizjournals.com