Sam s Club-Gallup Microbusiness Tracker. Media Q&A

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1 1 Sam s Club-Gallup Microbusiness Tracker Media Q&A

2 2 The Sam s Club Microbusiness Tracker Why is Sam s Club conducting a Gallup study of microbusinesses? Small business is a cornerstone of our member base. We are constantly conducting research into member needs and concerns but we wanted to do it on a broader scale to give a national voice to microbusiness owners. We see microbusiness defined as fewer than five employees -- as an under-reported segment of the small business community. The smallest of U.S. businesses is often combined into the larger definition of small business, yet their mood and mindset can be very different. The majority of our business members are microenterprises so we re very interested in understanding their unique concerns and needs. What is it? What does it measure? The partnership with Gallup and the launch of this quarterly U.S. Microbusiness Tracker is the first of its kind. The survey looked at 868 microbusinesses nationwide defined as fewer than five employees. It s an in-depth look at the mood and mindset of Main Street businesses and includes regional differences, a focus on women entrepreneurs and how newer versus older microbusinesses view the economy. What is the vision for this survey? The Sam s Club Gallup Microbusiness Tracker will be a quarterly survey enabling us to share trends over time related to microbusiness owners, decision makers and influencers in providing solutions to this significant segment of the U.S. economy. How do you define microbusiness? What makes a microbusiness different from a small business? This survey defines microbusinesses as companies with fewer than five employees. With more than 25 million microbusinesses in the United States*, they account for approximately 10 percent of all American jobs across a broad spectrum of businesses, such as pizza shops and cafes, convenience stores, pet groomers, mechanics, offices, day care centers and more. Microbusinesses are a unique segment within American small businesses which the federal government defines as companies with up to 500 employees. Microbusinesses are the smallest of the small. It s important that not only owners themselves, but policy makers, understand the different challenges microbusinesses are facing. Microbusiness owners are constantly juggling multiple tasks, from managing the dayto-day running of the business to generating leads and finding customers. This leads to uneven sales. Very few have enough cash to pay their bills let alone save for future growth. These business owners operate on little-to-no margin of error and need support. The unique data of the Sam s Club/Gallup Microbusiness Tracker not only aids policy and decision-making at the national level, but also provides real actionable insight for microbusiness owners.

3 3 What did you find most surprising in the study? While over 60% of microbusiness owners have financed their business from personal saving, over two-thirds of microbusiness owners are opting not to reinvest their tax refund into their business. As the economy continues to shift, women entrepreneurs are emerging in higher numbers than ever before women are more likely to be owners of the newest microbusinesses. Over half (54%) of newer microbusiness owners are pulling double duty they depend on a separate job for their personal income, vs. 31% of all respondents. There s a deep emotional investment in growing a microbusiness - over 60% of microbusiness owners have financed their business from personal savings. When you put your own money into it and take on another job to make ends meet this business is your heart and soul. Despite working two jobs and investing their own money, 69% say they have the ideal job. There s a happiness and optimism among this group in spite of the challenges. Microbusiness owners are more likely to say they want to spend more time serving customers (34%) than taking a personal time off (25%), planning for the company s future (21%) or running day to day business operations (19%). Unwilling to sacrifice quality 88% of microbusiness owners would not sacrifice quality or quantity of goods and services to improve their bottom line. What major issues do you find the microbusinesses are facing? Their top financial concerns are taxes/regulations, employee health care costs and utilities. For women, who are starting the new microbusinesses in higher numbers than men, access to capital remains a major issue with many relying on personal savings to start their dream. The majority of all microbusiness owners say healthy cash reserves are a constant concern. Will the findings inspire Sam s Club to take any specific action? The findings are a good way for us to keep a national pulse on what microbusiness owners need. They underscore that we should: Keep offering value at the pharmacy and across health related items. Continue financial support, like the WE Lend initiative, that gives access to capital so they can maintain healthy cash reserves and not rely as heavily on personal savings. Maintain and grow our deep commitment to quality while revenue may be relatively flat for many microbusinesses, 88% said they would not compromise quality to add to their bottom line. That tells us that our focus on quality products and unique items at membership value mean a lot to our small business member.

4 4 The Sam s Club Small Business Member How many business members does Sam s Club have? For more than 30 years, Sam s Club has served small business members. Today, with more than 630 clubs, we serve about 600,000 small business owners every day. The majority of these business members (70%+) are microbusinesses with fewer than 5 employees. Beyond this survey, how is Sam s Club investing in small business members? We re listening to our members and providing support and solutions. Last year, Sam s Club invested more than $2 million in microlending for small businesses, as well as in programs aimed at women-owned and Latino-owned businesses. In 2013, we provided $11MM in grants to organizations like SCORE, the National Association of Community College Educators and women-focused COUNT ME IN, who are dedicated to training, education and lifting awareness for microlenders and organizations that ease the burden of accessing capital. As a result, last year: We helped 3,600 micro business owners get the training they need to succeed; We enabled 265 small-business loans to micro businesses through non-profit grantees; We created or maintained 1,200 jobs. By helping small business owners grow revenue, they continue to be self-employed and hire others We continue to use data to learn more about our members and we are able to use our scale and resources to take our commitment to small business prosperity to the next level. Member Services: SBA Loans, Instant Savings, Business Expos, Click n Pull Philanthropy The Sam s Club Giving Program SCORE, NCRC, WIPP, Accion; focused on increasing financing, training and education for today s micro and small business owners to empower them to grow and create jobs in their communities. Major support of events, including U.S. Chamber of Commerce s America s Small Business Summit, Dream Big Blue Ribbon Awards at the SBA s National Small Business Week, NAWBO, Catalyst, Women in the World and several regional events. Showcase Events program bringing 150 new local small businesses to sell from our clubs every year. Supplier Summits for women, minority and veteran owned businesses to learn how to get on the shelf at larger retailers. SMALL BUSINESS BOOT CAMPS: Announced last year, Sam s Club provided a $500,000 grant to 24 community organizations like local SCORE chapters and Chambers of Commerce to host business-planning training for local businesses. From New Orleans to northern Maine and DC to Citrus Heights CA, our 24 Small Business Boot Camps helped more than 500 small businesses with business planning, HR, Marketing, Finance Support and so much more.

5 5 We are continuing to review the products and services and grants and education we could provide to microbusinesses to ensure we remain relevant with them and their pressing needs. Our goal is to provide ways to add value to their membership. At Sam s Club, we believe that the more we listen and connect, the more of a difference we can make in the communities we serve. As a big company, how does Sam s Club strive to be entrepreneurial? Sam Walton, one of the world s great entrepreneurs, started Sam s Club as a microbusiness owner with one location. Today, his entrepreneurial mindset still inspires associates at every level to think about the member first and how we can be a club of the community. How is serving small businesses part of the focus for Sam s Club? Entrepreneurship is an important cornerstone of the Sam s Club business. Our founder Sam Walton is one of the world s most successful entrepreneurs and thirty years ago, he developed Sam s Club to help small business owners. Beyond delivering value of membership, we have a commitment to supporting small business through projects like the Sam s Club Microbusiness Tracker and the Sam s Club Giving Program. Through targeted philanthropy, we helped to train over 3,600 small business owners, enable grantees to provide 265 small business loans and create or maintain 1,200 jobs through grants to nonprofit partners. We will continue to develop new services and membership advantages as well as offer training and financial support in local communities. Why is it important to Sam s Club to help micro and small businesses? These businesses are the very essence of the American dream, helping to drive the economy and job growth. So Sam s Club is proud to assist people as they start and build their operations. We all know an entrepreneur or visit them up and down Main Street from day care centers to the local pizza shop. We take great pride in being on their growth journey with them.