Running your own small business is rewarding but demanding, and few people understand the challenges better than other small business owners. Only those who have personally experienced milestones such as starting a company, finding customers and employing the first member of staff can truly appreciate just what goes into it.
According to figures from the Federation of Small Businesses, at the start of 2022 there were some 5.5m small businesses, accounting for more than 99% of the total business community. This means there is a vast network of small business owners, all of whom have compelling reasons to help others in their position. A thriving economy needs a strong small business backbone, and small firms themselves can be powerful entities when it comes to spending power.
Here are six ways in which small businesses are actively helping each other thrive:
According to research by American Express, which surveyed 500 senior-decision makers from small and medium-sized companies, almost two-fifths (39%) of small business owners regularly refer other small business owners’ products and services to people, making it the main way in which they help each other. This can add direct value through additional sales, as well as potentially leading to regular customers, who can then tell others.
“The value of this type of support cannot be underestimated,” says Amanda Salt, vice president, small & medium enterprises, UK Card Services, at American Express. “For over three-quarters (78%) of small business owners, a simple word-of-mouth referral from a fellow business leader is ranked as more valuable than those received via other channels.”
Linked to the above is the ability for small businesses to advise each other of particular products or services that will support them in the running of their business. More than a quarter (29%) show their support in this way, and over half (64%) of those surveyed say they always appreciate referrals and recommendations and are keen to return the favour. “Recommendations mean that small business owners can spend less time testing different products and solutions until they find the right fit for their own business, meaning more time to focus on driving growth,” points out Salt.
Sometimes there can be financial benefits for making recommendations, too. For instance, American Express is running a Limited Time Offer for every successfully approved referral that existing Business Gold Cardmembers make, until 14 November 2023 - terms and conditions apply.
Buying from other small firms
Specifically choosing products and services from small companies is the second most common way in which small businesses support each other, behind making recommendations.
Almost four-in-10 (38%) small business owners report purchasing goods or services from a smaller firm over those from a larger company. While this leads to a direct increase in sales for those firms, it can see reciprocal action taken by those small businesses, too.
Inspiring each other
One-in-five (20%) small business owners say they help new start-ups by inspiring or mentoring them. This could be through an official programme run by a business body or local initiative, or a more informal arrangement, such as offering advice to a neighbouring firm.
More than a third (35%) of those questioned say they would turn to other small business owners because they find their impartial advice useful.
Creating small business networks
Developing a small business community can also provide some much-needed support when it comes to coping with the pressures of running a business, and 24% say they benefit from joining small business networks. This could be through local business groups or online networking.
Almost half (46%) of those surveyed agree those in a similar position are more likely to understand the unique challenges of business ownership. “A trusted community of peers gives them the peace of mind that they have a strong support network when they encounter any challenges,” adds Salt.
Collaborating with other small firms
Small businesses can support each other in other ways, too. This could be through sharing workspaces or equipment, such as vehicles, agencies or even staff. This can help keep costs low and give small firms the ability to try out new things or expand cautiously. Nearly one-in-five (18%) say they have helped other small businesses in this way.
Providing such support means the small businesses that play such a vital part in our economy and society have a much better chance of succeeding, believes Salt. “Ultimately, all kinds of support, from referrals and recommendations to ensuring they source and buy products and services from other small companies, creates an environment in which both your own small business and your peers are better placed to succeed,” she concludes.
American Express supports and rewards small business owners through a range of products and services. Explore our Business Card range and the benefits available here.
American Express Services Europe Limited has its registered office at Belgrave House, 76 Buckingham Palace Road, London, SW1W 9AX, United Kingdom. It is registered in England and Wales with Company Number 1833139 and authorised and regulated by the Financial Conduct Authority
All figures not attributed to a source are based on fieldwork by Opinium on behalf of American Express. Fieldwork was run online between 29 September – 4 October amongst 500 senior decision makers from companies of less than 500 employees