Mar. 29, 2021 | Updated 12:23 PM ET
You might be surprised to learn that three out of every four small firms are micro businesses, or businesses with fewer than 10 employees. Sometimes referred to as “mom and pop” businesses, these firms are considered by many to be the true backbone of the U.S. economy.
A Wide-Ranging Impact
The impact of mom and pop businesses often extends far beyond just dollars and cents as these owners build vital relationships with their customers and communities. In addition, many mom and pop businesses are passed down from one generation to the next, equipping and inspiring the next generation of American entrepreneurs and innovators.
On March 29, these businesses will be recognized on National Mom and Pop Business Owners Day. This day of celebration was established nearly a century ago by Rick and Margie Segel to honor their parents, who opened a hat shop in 1939 and eventually grew it into a $2 million clothing store.
In recognition of National Mom and Pop Business Owners Day, OnDeck conducted a survey of small business owners asking them a wide range of questions about how they run their companies. Their answers could provide some insights that could help you run your business better.
Customer Service Strategies
The vast majority of survey respondents — over 91% — said that their customer service strategy is a key driver of their overall business success. While customers may occasionally shop at a larger store for the sake of convenience, most of them realize that when they frequent a mom and pop business, they will usually receive a higher level of customer service.
One respondent said that their business uses a three-step approach to customer service:
- Establish frequent customer contact
- Create and monitor performance reporting, and
- Demonstrate tangible return on investment.
Marketing and New Customer Acquisition
The most popular method of new customer acquisition among survey respondents is word-of-mouth marketing, which is used by 87% of them. The next most popular customer acquisition strategy is social media marketing (69%), followed by the business’ website (60%) and print and digital advertising (50%).
Facebook is by far the most popular digital marketing vehicle, used by 78% of the survey respondents. Google (55%) is the next most popular, followed by Instagram (25%), Twitter (20%) and Pinterest (10%).
Some respondents offered advice on creating a small business marketing plan. One suggested going “as deep and wide as possible into multiple customers.” Another recommended “defining your end game and strategizing your budget, search ads, display ads and social ads.” Yet another respondent stressed the need to provide “high value and a win-win” to customers. “Marketing is about engaging people and building lasting relationships with them,” this owner stated.
Motivating and Managing Employees
Employee turnover can be especially costly to mom and pop businesses. Not only is there the cost involved in hiring and training replacements, but these employees often build close relationships with customers that can be hard to re-establish.
Some survey respondents offered advice on how to boost employee satisfaction and motivation. One suggested taking an interest in your employees’ personal lives and “making them feel like family.” Another said the owner and employees try to do fun things together after work and “we joke around a lot too.” Yet another respondent recommended being as flexible as possible when it comes to giving employees time off for family, school and other personal commitments.
Unfortunately, most mom and pop business owners eventually reach the point when they have to let an employee go. Some respondents offered advice on how to do this. One suggested being upfront and honest and treating the situation with kindness. Another recommended caution and making sure you have documented reasons for the firing — “then do it with dignity.” Yet another stated: “Having bad employees hurts the entire company, but sometimes it’s necessary to prune the branches from time to time to allow the tree to flourish.”
Family Business Challenges
More than half (56%) of the survey respondents said that one or more family members work together in the business. Family mom and pop businesses face unique challenges that non-family businesses don’t. One of the biggest is keeping their personal and business lives separate.
“We always seem to talk business even though we try very hard to keep family and business separate,” said one respondent. Another recommended only discussing “positive work issues outside of business hours.”
We Salute You!
Firstrust salutes all mom and pop business owners. We recognize the challenges you face and the tremendous contributions you make to our economy and your local communities, and we’re committed to doing everything we can to help you succeed.