Go local for small business

Generating £600bn a year, small businesses are a lucrative market for advertisers. Local press is a key medium for targeting this influential sector

According to Department of Trade and Industry figures, 98 per cent of all 3.7 million active businesses employ fewer than 20 staff, although this small business sector generated a staggering &£600bn in turnover last year. These figures look likely to rise, as Government and DTI business start-up schemes facilitate the growth of the small business sector.

Forty-seven per cent of the total 7.75 million business people work in small companies, says Business Choice, a business and media survey conducted by RSGB for The Newspaper Society. The survey, which won this year’s Media Week Research Project of the Year award, made a comparative study of both large and small businesses for 1998.

Business Choice defines small businesses as those which employ 20 staff or fewer, and large businesses as those employing 2,000 or more.

The survey’s results suggest that those working for small businesses have greater authority in the overall purchasing process than their counterparts in large businesses. In fact, 65 per cent of all UK final decision-makers work for small companies, while only nine per cent work for larger organisations.

Business Choice shows that smaller organisations have a particularly strong local focus, reflected by high levels of local media consumption. Regional press achieves 68 per cent penetration in this sector compared with 32 per cent for national broadsheets. In particular, regional evening newspapers have a 24 per cent penetration among the small business community, while The Times achieves eight per cent and The Financial Times only two per cent.

Business people working for smaller organisations tend to have greater interaction with local media, with 57 per cent placing ads in regional press, compared with 24 per cent using the Yellow Pages and 18 per cent using the trade press. Regional press also receives the highest response rate of all media for those working in the small business sector.

Not surprisingly, the penetration for both commercial and BBC TV is high among those working in both large and small businesses. Yellow Pages also has a high level of coverage among those working for smaller businesses, while those in larger companies are more likely to have access to the Net.

Business Choice covers over 30 product and service sectors from mobile phones and company vehicles to IT. It may surprise those working for national or multinational companies to discover that most business activity is conducted at a local level. In fact, 66 per cent of all business people claim to source their products and services locally or regionally – even in sectors with more national focus, such as personal computers, photocopiers and plant equipment.

Local focus is also demonstrated by affiliation with the local area. Eighty-five per cent of those working for small businesses live within a ten-mile radius from their place of work, and almost half live a mile away or less.

The level of interaction between home and work is growing, with 46 per cent of business people having some form of work environment at home. This figure is higher for those working for small companies due to the inclusion of the self-employed in the sample.

Business Choice data showing the rise in home working adds to the many other studies forecasting growth in this area. According to the Economic and Social Research Council, the number of people working from home has doubled in the past 15 years.

Similarly, other sources show that almost a third of business people expect to work from home more often in the next few years. With the increase in the number of small businesses and the predicted growth of working from home, it is likely that the demand for products and services at local level will grow.

The small business sector cannot be ignored by any advertising campaign targeting the business-to-business category, according to the research. The regional press has an extensive degree of interaction with this sector. High penetration, ad response and ad placement suggest that regional press is a key medium to reach and generate a response from this highly influential sector.

Factfile is edited by Julia Day. Mike Jeanes, research manager at The Newspaper Society, contributed

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