Small Business Needs Assessment Grand Valley

Small business needs assessment grand valley

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Seidman Business Review
Volume 23 | Issue 1 Article 11
Small Business Needs Assessment
Jennifer Deamud
Grand Valley State University, [email protected]
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Recommended Citation
Deamud, Jennifer (2017) "Small Business Needs Assessment," Seidman Business Review: Vol. 23 : Iss. 1 , Article 11

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Copyright © 2017 by the authors. Seidman Business Review is reproduced electronically by [email protected].
Small Business Needs Assessment
Jennifer M. Deamud, M.P.A., M.S., COO/Associate State Director
Michigan Small Business Development Center
Small businesses are expanding the challenges small businesses are seeking to address

and thriving in Michigan, but Respondents were most likely to seek outside help for
increasingly they find they need challenges related to defining and serving a market and
assistance in managing their accessing capital

growth and success. • The extent of small business challenges and access to
outside assistance vary by region within the state

This article highlights some key • In-person methods of delivering small business services and
findings of a recent statewide support were perceived as more effective than other methods

project focused on small
business growth, challenges Lessons and Implications
and how to help Michigan • It is increasingly important to tailor approaches to outreach
small businesses prepare for and service delivery in order to meet the needs of more
future success. It has been diverse business owners

twenty-five years since a • Outreach and service-delivery strategies that emphasize
comprehensive small business positive impacts on sales growth may help convince more
needs assessment of this depth was conducted in the state small businesses to engage outside help

by a combination of partners. • Firms might value advice in deciding whether to seek
outside assistance and in locating appropriate help. Firms
The study was designed to answer the following questions: may need to be more aware of available resources

 hat are the key barriers and challenges that impede the • Considering the volume of small firms and variety of
survival and growth of small firms? What are the key service challenges facing small businesses, the data in this report
needs that arise from them? may provide some basis for targeting services in challenge
 hat beliefs do business owners have about the most areas where firms are looking for outside help and
effective means of delivering business services? struggling to find it

 ow can providers of business services apply their services • In regions with lower perceived levels of access to needed
and resources to better meet the needs of small businesses? assistance, additional assessment of service availability and
barriers to access may be necessary in order to develop
Key Findings effective strategies to better connect small businesses with
 iversity among small business owners is increasing. The high-quality service providers

proportion of businesses owned by racial minorities and • When designing and delivering small business services,
women is on the rise. efforts to increase efficiency and convenience should be
 ore than two-thirds of the businesses surveyed indicated balanced with an emphasis on relationship-building and
that they have a “strong desire and take steps to scale up face-to-face contact with customers

the company.”
 early all businesses experience challenges, but relatively few Growth Orientation
seek outside help to address those challenges. Almost 90 Nearly 70 percent of respondents indicated that they would
percent of respondents noted one or more challenge areas, describe their businesses as growth-oriented, meaning they
and 45 percent identified two or more areas as challenging. have a “strong desire and take steps to scale up [the]
However, only 50 percent of those experiencing challenges company” (Figure 1). An additional 23 percent of respondents
indicated that they had ever sought outside assistance to described their businesses as stable in size and annual
address those challenges. revenues, with only nine percent indicating that their
 ecisions to seek outside assistance and experiences with businesses were downsizing, preparing to close, or closed

outside business services are influenced by the nature of
26 Seidman Business Review • 2017
Small Business Assistance
Figure 1: Self-Reported Growth Half of the small businesses facing challenges sought outside
Orientation of Small Businesses assistance. Although 9 out of 10 small businesses indicated
that they experienced challenges in at least one of the areas
Decreasing listed, only 50% indicated that they had ever sought outside
Revenue Preparing assistance with addressing any of those challenges. As illus-
6% to Close trated in Figure 2, though, the likelihood of a small business
or Closed deciding to seek outside help increased as the number of
identified challenges increased

Stable Size/ Figure 2: Proportion of Businesses That
Revenue Sought Outside Help for Any Challenge,
by Number of Challenges Identified
1 42.2%
Number of Challenges
2 62.5%
3 76.4%
4 82.4%
Among growth-oriented businesses, sales were, by far, 5 93.8%
the most frequently identified target for business growth

Proportion of businesses seeking to grow sales, market share
0% 20% 40% 60% 80% 100%
or headcount:
• 57.1 % seeking to grow sales
• 12.2% seeking to grow market share
• 10.7% seeking to increase headcount
Small Business Challenges
Small businesses face a myriad of challenges that can impact
growth and/or stability. Survey respondents were asked
whether the stability or growth of their companies was limited
by challenges. Nearly all businesses experienced challenges

The proportion of respondents who selected each area as a
challenge were:
• 36.9 percent in defining and serving a market
• 35.6 percent accessing capital
• 29.2 percent in workforce or talent development
• 20.2 percent in operations and technology
• 13.5 percent in management or administration
While no single area was identified as a challenge by more
than 37% of respondents, almost 90% of respondents indicated
that they experienced challenges in at least one of the areas

Forty-five percent identified two or more areas as challenging 27
Communication Channels for Delivering Michigan SBDC and the PINE Consortium
Information Needed by Small Businesses The Michigan SBDC is funded by a combination of federal,
Survey respondents were asked to rate the effectiveness state and local funding to provide business counseling, training,
of various communication channels in delivering the secondary market research assistance and technology
information needed to run a successful business. The commercialization services to existing and startup businesses

majority of respondents perceived nearly all of the options The Michigan SBDC guides small business as well as keeps a
presented below to be somewhat effective or very effective. pulse on small business needs all across Michigan to ensure
The communication channels rated as effective by the the right services and tools are available to help small
highest proportion of respondents, though, tended to be businesses succeed. For sixteen years, the Lead Center of
the options that involved in-person interaction (i.e., informal the Michigan SBDC has been hosted by Seidman College
networking, face-to-face meetings, and in-person workshops of Business, Grand Valley State University

or training sessions). On the other hand, the options least
likely to be rated as effective were those that often require Both the Michigan SBDC and SBAM are part of the PINE
sorting through a wide variety of content in order to find Consortium, an international collaboration of business,
specific and relevant guidance (i.e., e-mails; Twitter, government and university members helping to better
Facebook, or other social media; and newspapers). align public and private entrepreneurial support with the
priority needs and interests expressed by small and
medium-size enterprises

Figure 3: Most Effectiveness of Means for Delivering Assistance
Somewhat Effective Very effective
Informal networking 44.0% 34.2%
Face-to-face meetings off site 32.0% 45.7%
In-person workshops or training sessions 36.7% 37.8%
Face-to-face meetings at your site 28.1% 41.4%
Written materials from consultants or advisers 43.5% 23.7%
0% 20% 40% 60% 80% 100%
In Summary Methodology
There are a significant number of small businesses in Michigan The research team at PPA used an online survey tool and
that are positioned for growth. These small businesses plan to, e-mail invitations to engage potential respondents. The
and in many cases will, encounter a number of challenges. The target audience included Michigan firms with fewer than
results and the information gathered by the Michigan Small 500 employees. The pool of invitees was assembled from
Business Needs Assessment will provide guidance on how to multiple business lists, including a subset of Michigan SBDC
better serve Michigan’s small businesses to help foster their clients, current SBAM members and a proprietary list of
economic growth. Michigan businesses. A total of 1,186 usable responses were
completed. These responses were then weighted according
Acknowledgments: to sector, age of business, and number of full-time employees,
The Michigan Small Business Development Center (Michigan to permit results that represented the full spectrum of
SBDC) would like to thank the Small Business Association of Michigan businesses

Michigan (SBAM) for collaborating on this joint research
project, the expertise of Public Policy Associates (PPA) and
Neil Sheridan who facilitated the project collaboration with
PINE and fielded the survey

28 Seidman Business Review • 2017

Project focused on small business growth, challenges and how to help Michigan small businesses prepare for future success. It has been twenty-five years since a comprehensive small …

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