Confidence in SMEs Is High — Use It to Your Advantage

For many years, consumers and stakeholders alike have felt more confident purchasing from and investing in large corporations such as Amazon and Walmart. Despite small businesses comprising almost all of America's companies and employing nearly half of all American employees, they have historically been eschewed in favor of these conglomerates. However, that's changing quickly and small-business owners must use these evolving sentiments to their benefit.

Increased consumer approval

According to Vanderbilt University political science professor Cindy Kam, large companies are increasingly perceived as negligent, uncaring and fraudulent while small businesses are being regarded as trustworthy, honorable and committed to their community's wellbeing; and the data proves it.

Gallup's recent Consumer Confidence in Institutions Survey revealed that three-quarters of respondents have either "a great deal" or "quite a lot" of faith in small businesses, more so than in any other institutions such as the military, judiciary and health care system. Fewer than 20% of Americans expressed confidence in big business, meaning the approval rate of small businesses is over three times that of larger ones.

Consumer approval of SMEs is at a new high.

Rising business owner conviction

A survey conducted by the National Federation of Independent Business earlier this month discovered that its Small Business Optimism Index increased by almost two points in the first two weeks of September alone. While many small-business owners are still apprehensive about the possibility of another massive economic recession, the number of entrepreneurs who are expecting improved business conditions has increased by 10 points since July.

How to make the most of it

Traditionally, consumers have been attracted to products sold by commercial giants because of their reduced prices. The high costs of small and medium enterprises (SME) goods and services have long been deterrents to consumers but as small businesses become more successful, they'll be able to lower their prices. That said, independent business owners would do well to maintain the basics of a small business model such as investment in the local community, no matter the company's size.

To capitalize on this new-found faith in SMEs, business owners should follow a few basic principles regardless of their company's growth:

• Advertise your expertise: Consumers trust small businesses because they believe them to be experts in their industries. Market your company's knowledge and experience in its field.
• Invest in your community: Because small businesses play such an important role in job creation, they contribute significantly to local economies. Show your employees and customers how your company is giving back.
• Maintain your customer service experience: Consumers rate SMEs very highly in part due to their responsiveness. Continue focusing on the quality of your customer service in ways larger businesses can't.

It's crucial to get the right legal advice at the right time when starting up a small business. Reach out to the Law Offices of Donald W. Hudspeth, P.C. to learn how we can assist you on your entrepreneurship journey.

Categorised in: Starting a Business in Arizona

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