What Small Business Owners Value Most in 2019
"Small business" is a broad term. It can mean anything from a family-run bakery to a small pediatrics practice to a local architecture firm. While small business owners may be spread across many industries, they actually have a lot in common--more than even we realized.
We recently finished gathering data for our US small business survey, and the results are, in many ways, quite enlightening. In some areas, however, the responses are less surprising and more of a confirmation of what many professional service providers--and more specifically accounting and tax pros--have probably hypothesized about their clients all along.
Let's dive into some of our key findings and explore how they can be relevant to anyone working in the realm of small businesses.
Knowledge and trustworthiness are key
We surveyed approximately 2,500 business owners (see the end of this article for specific details on our respondent pool) and found that their accounting and tax professionals of choice have a few key attributes in common:
Knowledge (55.8% rated excellent)
Trustworthiness (54.8% rated excellent)
Responsiveness (54.7% rated excellent)
Friendliness (53.8% rated excellent)
Other characteristics that are clearly important for small business owners? Keeping clients informed, being proactive, and being cost-effective.
Accountants are crucial advisors
We were not surprised to see that 72% of small business owners declared accountants, CPAs, and tax professionals to be very important advisors over other professionals like attorneys, business bankers, insurance agents, and computer consultants. This sentiment has been echoed in other studies as well.
Only 3% of small business owners felt that accounting and tax pros were not important to their business, and only 2% of respondents did not use these professionals. On the other side, anywhere from 10 - 14% of respondents did not view the other professionals as important to their business, with up to 14% not utilizing their services at all.
Small business owners need assistance in critical areas
In the past twelve months, respondents sought help from many professionals:
71% used an accounting or tax professional.
40% used an insurance agent or lawyer.
39% used an attorney or lawyer.
38% used a computer or technology consultant.
31% used a business banker.
In the accounting and finance areas specifically, 54% relied on an outside professional to handle their tax preparation & planning, rather than doing it themselves (or in-house). 35% rely on an outside professional to handle their auditing.
Surprisingly, 60% handle their budgeting themselves--could this be why so many businesses are failing?
Where do they find professional service providers?
We know from the survey data how important it is for small business owners to find outside help--specifically in accounting and finance. So, where do they turn to find quality professionals that meet their needs?
While 59% still turn to referrals from colleagues, friends, and family (historically the most prevalent tactic), we were impressed to see that a combined 65% turn to online options like review websites (Yelp, Angie's List, TaxBuzz, etc.) and social media sites.
The relevance of reviews was echoed again when we asked which factors are most important to owners when hiring a professional for their business:
44% of respondents said that seeing excellent reviews and testimonials from a professional's clients was very important in helping them make their decision. Also significant? A high level of knowledge and experience (66%) and competitive fees (46%).
Most business owners are very satisfied with their accounting or tax pro
While there is of course variation across the industry, most of the small business owners we surveyed are extremely satisfied: 70% of small business owners have used an accounting or tax professional in the last 12 months, and out of those, 95% are satisfied.
...But they have ideas for improvements
Mistakes were the #1 reason that small business owners felt they had a bad experience with a tax or accounting professional in the past. Other reasons were poor communication, overcharging for services, or missed deadlines.
When asked if there was ONE thing their accountant(s) or tax professional(s) could do BETTER, 1 out of 3 small business owners said "reduce fees." Other areas they'd like to see improvements? Faster responses to inquiries (15%), being more proactive (14%), and keeping clients better informed (12%).
They're taking advantage of technology
Unsurprisingly, small business owners are continuing to recognize the benefits of utilizing various technologies in their day-to-day lives.
Respondents are clearly making the most of the infinite apps available to them. 77% said they used an app to check Email in the last week. 68% used text messaging apps. Social media? 63%.
Data points that we were especially interested to see on the rise were accounting or payroll apps (23%) and business-specific or business productivity (6%). However, it's clear that apps are still mainly used for personal time--not work.
When asked which type of accounting software they use for their business, respondents showed there is an increasing willingness to use the cloud. More traditional methods like the QuickBooks desktop software and spreadsheets or manual bookkeeping are still used (42% and 38% respectively); however, many are now use cloud accounting methods like QuickBooks Online (27%) and Xero (15%).
Out of those who said they were currently using spreadsheets or desktop software accounting and payroll applications, 50% said they are likely to move those applications online or to the cloud within the next 12 months.
Now that is a big opportunity area.
There was even more evidence of a shift to the cloud among small business owners and the pros they hire: 61% of respondents said they would be likely to participate in an online meeting or video conference with their accountant or tax professional rather than meeting in person, and 50% said they would be likely to hire a 100% "remote" or "virtual" professional located outside their local area.
As our small business survey shows, the way business owners interact with professional service providers--and how they go about hiring them in the first place--has shifted considerably in recent years.
it is no longer a requirement to only work within one's local market. If a professional has outstanding reviews and a great online presence, they can widen their target to small business owners everywhere that are seeking high-quality help.
Were you surprised by any of the findings from our small business survey? Do you have any observations or other sources to add to the conversation?
Our survey had 2,441 respondents, 1,892 of whom were small business owners. For the purpose of this article, we focused on this group specifically. Below are graphics showcasing various characteristics of our respondent pool.
Lee Reams II and Lauren Detweiler
Lee Reams II I am a marketing junkie who has spent the last 20 years developing and executing "best in class" word-of-mouth marketing campaigns. With over 10,000 happy clients I think we are on to something. The explosion in web marketing and social media have redefined the way independent professionals market their practices. Follow my blog to see if you can take some of our actionable ideas to market your own practice. Lauren Detweiler I am equal parts marketer, traveler, and writer, and I've been doing all three for as long as I can remember. I have spent most of my time since graduating university traveling and working remotely in Africa and Europe. My passion lies in conveying the right messaging to the right people, and being a part of the CountingWorks and TaxBuzz team means I get to do that not only for our company, but for clients across the country as well.
In the face of economic uncertainty, TaxBuzz is the industry's most up-to-date tax information.
Join 60,000 who get our weekly newsletter. No spam.
Need help selecting a firm?
Use our specialized search engine and get matched to the best accounting and tax firm for your needs.