July 15, 2013, Markham, ON – Creating a recognizable and trusted brand is an important concern in today's competitive market, according to 93 per cent of small business owners (SBOs), in a study.
The quarterly American Express Small Business Monitor revealed that business owners have prioritized branding strategies with 71 per cent saying brand experience is the most important part of their business' overall brand.
SBOs are also placing a high value on branding as the majority, 51 per cent, report branding is critical to attracting new business.
"Having a powerful brand is vital in today's economy, it can be the difference between a business that blends in with the crowd or stands out from the competition," says Athena Varmazis, Vice President and General Manager, Small Business Services, American Express Canada. "It's refreshing to see business owners placing an emphasis on branding since it's their platform to tell their business' story with current and future customers."
SBOs display a willingness to go digital but stay true to traditional approaches
With consumers embracing social media and leveraging social platforms when making purchase decisions, almost three quarters (73%) of SBOs report that they need to constantly monitor their brand's perception.
As such, SBOs have welcomed digital elements into their branding with over half (52%) of business owners utilizing a company website to build their brand. Yet many still rely heavily on traditional approaches stemming from internal communications.
Sixty per cent of business owners rely on the actions of their employees to communicate the brand to their customers and almost half (45%) of these report it being effective.
Furthermore, 32 per cent of small business owners leverage events to help increase brand awareness.
SBOs desire a strong brand presence, yet have room for improvement
The demand for a strong, prominent business identity is at an all-time high with 84 per cent of business owners stating that branding is important to the overall success of their business. While SBOs feel an increased need to stand out from the competition, 55 per cent aren't refining their brand annually and may be missing the opportunity to assess the evolving trends to ensure their business stacks up in the market.
Thirty-six percent of SBOs admit that they are interested in expanding their brand, but don't know where to start. Despite this, a substantial 86 per cent of SBOs still choose not to capitalize on the resources third party experts offer, with more than one quarter (29%) of SBOs relying on themselves in the development of their business' brand.
"It is surprising to see that the majority of SBOs aren't investing in the necessary third party resources to help them develop and refine their brand, yet they are willing to invest in other areas, such as accounting, legal or payroll," says Varmazis. "Branding plays a significant role in the overall success of their business and shouldn't be taken lightly by business owners."
Overall business outlook continues to decline for SBOs
Results reveal that Canadian SBOs are wary about the outlook of their business and are therefore making more reserved and thoughtful decisions when it comes to business growth. The index portion of the monitor reveals a decline in SBOs' optimism levels year over year.
Although over half (55%) of SBOs remain hopeful about their future financial position, this has decreased by 15 per cent since this time last year. While 39 per cent of SBOs report their business' current financial position is improving, this number is down 21 per cent from April 2012.
Coupled with only one-fifth (22%) of SBOs willing to take above average or significant risks for their business in the next six months, also declining over the past year (April '12 38%), it is evident that SBOs are more reserved about the decisions effecting their businesses.
"Optimism levels have declined below what they were a year ago, leaving SBOs mindful and cautious when it comes to decisions affecting their business," says Varmazis. "Now, more than ever, business owners are mitigating risks and are carefully planning for the future."