Comparing Small & Mid-Sized Businesses Across America

SMBInsights
2016
REGIONAL PERSPECTIVES
Small & Mid-Sized Businesses Across America

5-499 Sized
Companies
National Market
Study
via
TelephoneàInternet
Fielded January
2015
Owners/Partners,
C-Suite, Key
Decision Makers
2
Research Method
Interviews per Market:
272 Northeast
471 South
316 Midwest
309 West

Preface
3
Small and mid-sized business owners, no matter where they live in the United States, are an elite
group. Their ranks consist largely of men (66%) who are well educated and upscale. Their
businesses are well-established and moderately sized (23.9 employees on average). In 2014, their
annual sales reached an average of $7.7M. The large majority (93%) generate sales in their local
market.
The purpose of this analysis is to highlight the differences in the behaviors and attitudes of SMB
owners that occur across the four Census regions.As this report details, some of these differences
are quite pronounced, while others are more subtle and nuanced. Taken in total, the hope is to
provide a fuller view of SMB owners across the country, and help to ensure that each region’s
particular dialect of business is more fully understood.
Note: A +/- 4% point difference between regions is statistically significant at the 90% confidence level
or higher.

REGIONAL PERSPECTIVES
Insights
2016
SMB
4
Page
Executive
Summary 5
Regional
Snapshot 6
Western
SMBs 7
Southern
SMBs 15
Midwestern
SMBs 23
Northeastern
SMBs 31
Regional
Summary 39

Executive Summary
5
Small and mid-sized business owners share many characteristics no matter where they happen to live. Yet, each region
shows interesting characteristics, attitudes and approaches that sets it apart from all the others.
Western SMBs: Change Agents
Western SMBs zig when the rest of the country’s SMBs zag. They strongly see themselves as leaders and visionaries.
They join local organizations and Boards to make their voices heard. They care about the environment, see technology
as a badge, and display a lot of diversity and new ways of working. Skills shortage is a major concern.
Southern SMBs: Driven
Southern SMBs do not have the sales and income levels of the northeast and west, but they are on a mission to change
that. Their annual sales growth rate is testament to their efforts;; it is the second growth region in the country. Southern
SMBs are autonomous decision makers, are concerned about taxes, and are driven to achieve financial success. One
big standout: half are Republicans, the highest level of any region in the country.
Midwestern SMBs: Status Quo
Midwestern SMBs are the most laid back of any region in the country. They run the largest, most well-established
businesses;; and support their employees well by providing a host of benefits. They display the strongest local focus of
any region, perhaps due to being located in more non-urban settings than the other SMBs. Technology is not their forte:
nearly half find it hard to keep up, and their adoptions rates are lower than other SMBs. They are not the wealthiest
SMBs, but are the ones most confident they will have enough money to retire. In this area, they are covered.
Northeastern SMBs: Achievers
Northeastern SMBs are the most affluent and well educated of all regions, and also the hardest working. Their annual
sales are the highest, even though their sales are not increasing at the high clip of SMBs in the South and West. Their
businesses are mostly in white collar industries (e.g., services). Although 87% generate sales locally, their reliance on
their local community for sales success is lower than SMBs in other regions. Their adoption of technology lags slightly,
even though they are quick to point out that they have no difficulty keeping up with the latest and greatest.

6
REGIONAL SNAPSHOT
Change Agents
1.79M Businesses (+.80% v 2014)
24% of SMB owners
Status Quo
1.63M Businesses (+.28 v 2014)
22% of SMB owners
Driven
2.66M Businesses (+.44% v 2014)
35% of SMB owners
*Businesses with 1-999 employees (no sole proprietors)
Source: Small Business Research, Q4 2015 projection (based on CENSUS data)

Insights
2016
SMB
7
WESTERN SMBs:
CHANGE AGENTS

Western SMBs strongly see themselves as leaders &
visionaries...moreso than SMBs in other regions
8
79%
74%75%
69%
I often find myself in a leadership position I am forward thinking-have a vision
Western SMBs Other 3 Region Average
“Following are a series of statements that 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.”
Business Attitudes Among Western SMBs

Western SMBs are highly successful; they run smaller, younger
companies, with high sales and strong sales growth
9
$183K
22.3
$9.8M
25.8
$199K
24.8
$7.6M
20.6
Household Income
(avg)
# Employees (avg) Annual Sales (avg) Annual sales %
Increase*
*Among companies with sales increases…roughly 70% of companies across all regions
Western SMBs -- Key Indicators
22%
10%
Under 10 Years in Operation

Western SMBs include more women and minority-owned
businesses; they are less inclined to hunt & fish
10
37%
22%
28%
15%
Women-Owned Businesses Minority-Owned Businesses
5%
-7%
4%
5%
-15%
-9%
88%
66%
55%
36% 33% 33%
-130%-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
Difference Vs. Other 3 Regions Westerm SMBs
Lifestyle Activities
% Engage in Regularly/Occasionally
Women & Minority Ownership
“Would you describe your company as women-owned, that is, is 50% or more of your company owned by women?”
“Is 50% or more of your company owned by a Hispanic, African-American, Native-American, Asian or any other
members of a racial or ethnic minority group?” “How frequently do you engage in each of the activities listed below?”

33% 33%
31% 31%
17% 16%
11
SMB owners in the West are confident in the success of their
companies; they are planning to expand dramatically
Extremely
Confident
Confident
Very Confident
81% 80%
Confidence in Own Company
Success Next 24 Months
74%
74%
77%
82%
Other 3 Region Average
Western SMBs
2015
2014
Percentage Planning to Hire New Full-Time
Employees in the Next Year
“What is your level of confidence in the success of your company (based on revenue, profitability & growth) over the next
24 months?” “Approximately how many full-time employees are you planning to hire over the next 12 months?”

Despite higherunemployment rates, Western SMBs exhibit the
highest degree of concern about finding the ‘right’employees
12
54%
48%
Very Concerned About Finding &
Keeping Good Employees
5.5%
6.4%
4.9%
5.4%
Other 3 Region
Average
Western SMBs
Dec-15
Dec-14
Unemployment Rate
Source: Bureau Labor Statistics, Regional and State Employment and Unemployment, December 2015
“Let’s face it you’re one of the people in your business who has to be concerned with all of the issues related to running the business. So what are
the issues that you’re most concerned about?”

Western SMBs are more concerned about the environment and
global warming; they join organizations to make changes
13
50%
58%
57%
62%
Very/Somewhat concerned
about the world environment
& global warming
Agree that company
respects 'green' values & is
conscious of the
environment
36% 36%
30% 31%
Served on committee/officer for
local organization
Served on Board of Directors
agree/disagree with each one, using a 0-to-10 scale.” “Let’s face it – you’re one of the people in your business who has to be concerned with ALL of
the issues related to running the business. So what are the issues that you’re most concerned about?”
Environmental Attitudes Civic Activities

Western SMBs see technology as a badge and are heavy
users of multiple technology products & services
14
57%
52%
“The Kind of Technology I Have Reflects
the Type of Business Person I Am”
% Agree Completely/Mostly
Product and Services Used Past
Year for Business
36%
38%
40%
53%
66%
42%
44%
46%
59%
71%
Online providers
(LinkedIn, Monster)
for recruitment
Email marketing
Ethernet & data
networking
Apps
Laptop computers
“Please indicate the extent to which you agree or disagree with each of the following statements about technology.” “Which of the following products
or services have you used in the past year for your business?” “Where do you plan to source your new hires from?”

15
Western Summary
Source: Small Business Research, Q4 2015 projection
+25.8%
sales growth
‘green’
&
diversity
Expansion…Skills
shortage concern
Change Agents
1.79M Businesses (+.80% v 2014)
24%

Insights
2016
SMB
16
SOUTHERN SMBs:
DRIVEN

Southern SMBs run somewhat smaller& youngercompanies,
with lower sales, yet high sales growth
17
$166K
22.3
24.6
$5.7M
24.9
$194K
24.8
27.5
$9.0M
20.9
Household Income (avg) # Employees (avg) Years In Operation (avg) Annual Sales (avg) Annual sales % Increase*
Southern SMBs Other 3 Region Average
Southern SMBs -- Key
Indicators

Southern SMBs comprise an average share of women and
minority-owned businesses; they like sports, jogging & hunting
18
33%
15%
29%
13%
“Would you describe your company as women-owned, that is, is 50% or more of your company owned by women?” “Is 50% or more of your company
owned by a Hispanic, African-American, Native-American, Asian or any other members of a racial or ethnic minority group?” “How frequently do you
engage in each of the activities listed below?”
7%
5% 5%
-6%
-4% -4%
81%
53%
43%
38%
29%
22%
-130%-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
Difference Vs. Other 3 Regions Southern SMBs

32% 33%
35% 30%
17%
16%
19
SMB owners in the South are highly confident in the success of
their own companies, and exhibit modest expansion plans
Extremely
Confident
Confident
Very Confident
84%
79%
Success
73%
75%
79%
78%
Other 3 Region
Average
Southern SMBs
2015
2014
Percentage Planning to Hire New Full-
Time Employees in the Next Year
“What is your level of confidence in the success of your company (based on revenue, profitability & growth) over the next 24 months?”
“Approximately how many full-time employees are you planning to hire over the next 12 months?”

Southern SMBs make purchase decisions more autonomously
than other regions & are driven by financial gains
20
25%
29%
30%
30%
34%
35%
37%
40%
29%
35%
36%
37%
39%
39%
41%
46%
Commercial real estate
Marketing
Business Software
Technology Hardware
Financial/Investments
Business Insurance
Telecom
Accounting
Purchase Decision Making by Industry
‘I Make the Decision Myself without Seeking
Advice from Others’
47%
42%
“The Amount of Money I Make is
More Important Than What I Do”
% Agree
agree/disagree with each one, using a 0-to-10 scale.” “Your company undoubtedly interacts with & uses the services of many industries. Please
indicate how vendor & brand decisions are made by your company for each industry listed below…You make the decision by yourself.”

Half of southern SMBs are Republicans; they have greater
concern about taxation on their businesses
21
Republican
50%
Independent
23%
Democrat
15%
Other/None
12%
Republican
40%
Independent
28%
Democrat
20%
Other/None
12%
Southern SMBs
Other 3 Region
Average
Political Affiliation
42%
47%
Other 3 Region
Average
Southern SMBs
Very Concerned About
‘Possible Tax Changes that Could Hurt
Your Business’
“Politically, do you consider yourself…?” “Let’s face it – you’re one of the people in your business who has to be concerned with ALL of
the issues related to running the business. So what are the issues that you’re most concerned about?”

Southern SMBs are less inclined to view technology as a
badge; nonetheless,they are avid technology users
22
49%
54%
“The Kind of Technology I Have Reflects
the Type of Business Person I Am”
Year for Business
31%
40%
47%
53%
67%
73%
37%
45%
51%
59%
71%
78%
Mobile/internet
payment devices
Ethernet & data
networking
Tablet
Apps
Text messaging
SmartPhone
“Please indicate the extent to which you agree or disagree with each of the following statements about technology.” “Which of the following
products or services have you used in the past year for your business?”

Social media is an important tool that Southern SMBs use to move
their businesses forward…significantlymore than other regions
23
73%
30%
68%
25%
Use Social Media for Business Generate Revenue Directly from Social
Media
Social Media Usage for Business
“Which of the following Social Networks do you or your company currently use?” “Has your company generated revenue directly from Social
Media?”

24
Southern Summary
+24.9%
sales growth
50%
Autonomous
Highly confident Driven
2.66M Businesses (+.44% v 2014)
35%

MIDWESTERN SMBs:
STATUS QUO
Insights
2016
SMB
25

Midwest SMBs skew toward non-urban areas (C/D counties); and
generate lower sales and personal income than other regions
26
$179K
$1.55M
$5.5M
19.7$194K
$1.56M
$9.0M
22.6
Household Income
(avg)
Net worth (avg) Annual Sales (avg) Sales % Increase
(avg)*
Midwestern SMBs Other 3 Region Average
Midwestern SMBs – Key Indicators
66%
32%
72%
18%
College Grad+ C/D Counties

Midwest SMBs run larger, more well established companies; their
sales are more locally focused than other regions
27
32.0
26.125.0 23.5
Years in Business (avg.) # of Employees (avg.)
Midwestern SMBs -- Other Business
Indicators
Midwestern
SMBs
Other 3 Region
Average
Generate Any Sales
Locally 98% 91%
Nationally 57 63
Internationally 23 28
“Including yourself, how many full-time employees does your company have in total, that is, at all locations including all the divisions, subsidiaries
and branches of your company?” “How many years has your company been in operation?” “Let’s get a quick overview of the geographic markets
your company serves. Using 100 % points, how would you break down your company’s 2014 sales among the following three categories: within
your local area, the rest of the US, outside the US.”

Midwest SMBs comprise fewer minority-owned businesses; in
general, they like sports, hunting & volunteering locally
28
30%
8%
30%
15%
“Would you describe your company as women-owned, that is, is 50% or more of your company owned by women?” “Is 50% or more of your
company owned by a Hispanic, African-American, Native-American, Asian or any other members of a racial or ethnic minority group?” “How
frequently do you engage in each of the activities listed below?”
7%
5%
-10%
9%
-6%
8%
81% 78% 77%
46% 44% 40%
-130%-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
Difference Vs. Other 3 Regions Midwestern SMBs

35% 32%
26% 33%
17%
16%
Midwestern SMBs Other 3 Region
Average
29
Midwest SMBs are less confident in the success of their own
companies; yet their expansion plans are on par with other regions
Extremely
Confident
Confident
Very Confident
Success
74%
73%
79%
78%
Other 3 Region
Average
Midwestern SMBs
2015
2014
78% 81%

Among Midwest SMBs who provide employee benefits, the degree
of coverage is greater than that of other regions
30
Offer Employee Benefits/Health Insurance: Northeast (68%), Midwest (64%), South (66%), and West (67%)
“What insurance benefits do you offer your employees?“
Offer Employee Benefits & Health
Insurance
Insurance Benefits Offered to Employees
(Base: SMBs Offering Benefits)
21%
26%
35%
35%
38%
85%
25%
30%
42%
43%
55%
85%
Accident insurance
Hospital insurance
Retirement/Pension Plans
Disability Insurance
Life Insurance
Health insurance
64%
67%

Despite lower incomes, Midwest SMBs have less concern about
their financial futures; they rely heavily on financial professionals
31
Not Very Concerned About Having
Enough Money to Retire
“Let’s face it – you’re one of the people in your business who has to be concerned with ALL of the issues related to running the business. So what are
the issues that you’re most concerned about?” ”What percentage of your personal investment portfolio consists of investments purchased for you by a
financial planner or investment company?” “How much do you agree or disagree with the following statements about your personal finances and
investments?”
61%
52%
Midwestern SMBs Other 3 Region
Average
48%
59%
80%
59%
66%
84%
Share of portfolio purchased by
investment professional
Use a financial planner to help
me manage my wealth
It's important to seek
professional help in making
investment decisions
(Agree
Strongly/Somewhat)
Attitudes About Personal Investing

Midwest SMBs find it harder to keep up with technology;
penetration of tech product usage is slightly lower
32
48%
43%
“I Find it Hard to Keep Up With the Latest
Technology”
Year for Business
“Please indicate the extent to which you agree or disagree with each of the following statements about technology.” “Which
of the following products or services have you used in the past year for your business?”
34%
35%
49%
56%
70%
75%
28%
28%
45%
50%
64%
71%
Mobile payment devices
Cloud computing/cloud-
based services
Tablets
Apps
Text messaging
Smartphones

33
Midwestern Summary
Local!
Status Quo
1.63M Businesses
22% (+.28% v 2014)
Good Benefits Set for Retirement

Insights
2016
SMB
34
NORTHEA TERN SMBs:
ACHIEVERS
$

Northeastern SMBs are well-educated, affluent achievers with the
highest sales of all regions
35
$203K
$1.7M
$11.5M
17.2
$181K
$1.5M
$7.0M
23.5
Household Income
(avg)
Net Worth (avg) Annual Sales (avg) Annual sales %
Increase*
Northeastern SMBs Other 3 Region Average
Northeastern SMBs – Key Indicators
75%
69%
College Grad+

Northeastern SMBs run larger well-established, white collar
businesses; they work longer hours than SMBs in other regions
36
27.8
26.0
26.4
23.5
Years in Operation # Employees (avg)
Northeastern SMBs – Other Indicators
68% 68%
62%
64%
White Collar Industries Work 50+ Hours/Week
Northeastern SMBs

SMBs in the Northeast include fewer women and minority-owned
businesses; wine & gourmet food is especially popularamong them
37
20%
8%
33%
15%
7%
-5%
7%
10%
-6%
10%
-5%
6%
90%
81%
49% 46%
40% 40% 36%
29%
-130%-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
Difference Vs. Other 3 Regions Northeastern SMBs
“Would you describe your company as women-owned, that is, is 50% or more of your company owned by women?” “Is 50% or more of your company
owned by a Hispanic, African-American, Native-American, Asian or any other members of a racial or ethnic minority group?” “How frequently do you
engage in each of the activities listed below?”

32% 32%
34% 31%
14% 17%
38
SMB owners in the Northeast are confident in the success of their
own companies, and are showing modest expansion plans
Extremely
Confident
Confident
Very Confident
80% 80%
Success
75%
74%
79%
76%
Other 3 Region
Average
Northeastern SMBs
2015
2014

Like all SMBs, the large majority of northeasterners generate sales
locally, however, they are less reliant on local business alone
39
agree/disagree with each one, using a 0-to-10 scale.” “Let’s get a quick overview of the geographic markets your company serves. Using 100 %
points, how would you break down your company’s 2014 sales among the following three categories: within your local area, the rest of the US,
outside the US.”
Local Business Attitudes
% Agree
62%
57%
57%
50%
First and foremost our company
tries to do business with other
local companies
Marketing/selling directly to the
local community is a key
component of our company's
success
87%
64%
32%
94%
60%
25%
Locally Nationally Internationally
% Generating Sales in Each
Geographic Location

Northeastern SMBs travel for business…but to a lesser extent
than other regions by plane, and to a greater extent by rail
40
33%
64%
16%
30%
70%
8%
Business Travel 1+
Times/Month
Share of business trips by
plane
Travel by rail
Frequency and Means of Business
Travel
“Approximately how often do you travel outside of your local area for business?” “What percentage of your business trips utilize airline
travel?” “Which of the following products or services have you used in the past year for your business?”

Northeastern SMBs have little difficulty keeping up with
technology, however, they are less avid adopters
41
Year for Business
43%
56%
69%
74%
75%
37%
50%
63%
68%
70%
Ethernet & data
networking
Apps
Laptop computer
Company website
SmartPhone
“Please indicate the extent to which you agree or disagree with each of the following statements about technology.” “Which of
the following products or services have you used in the past year for your business?”
59%
55%
Don't find it hard to keep up w/ technology
Technology Attitudes
% Agree

42
Eastern Summary
$11.5M
annual sales
$

43
Regional Summary
$11.5M
annual sales
$
+25.8%
sales growth
+24.9%
sales growth
‘green’
&
diversity
Expansion…Skills
shortage concern
50%
Autonomous
Highly confident
Local!
Change Agents
1.79M Businesses (+.80% v 2014)
24%
Status Quo
1.63M Businesses
22% (+.28% v 2014)
Driven
2.66M Businesses (+.44% v 2014)
35%
Good Benefits Set for Retirement

Research:
Jessie Shaw
212-500-0611
jessieshaw@bizjournals.com
44
Tyler Reavis
704-973-1212
treavis@bizjournals.com
CONTACTS

Comparing Small & Mid-Sized Businesses Across America

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