How Big is the "Small Business" Market Opportunity?

There always are two lines of thought on small business connectivity revenue potential, though perhaps less divergence in the applications area. The first line of thought is that small businesses are an underserved segment of the market specialists can tap as the bigger firms will generally ignore the segment. 

The countervailing view is that small businesses generally have buying characteristics quite similar to consumer accounts--price sensitivity and relatively low spending compared to larger businesses--for and for that reason are not so attractive. 

Much hinges on the definitions. There is a key difference between small and micro business that shapes potential opportunities for connectivity service providers and their channel partners. 

Most “small” businesses--in terms of total number--are sole proprietorships with zero employees. By some definitions, micro businesses have up to 10 employees. 

Small businesses can have as many as 100 to 250 employees. The definition of “small business” used by the U.S. Small Business Administration defines organizations of up to 1,500 employees as small, depending on the industry. 

In an Asia and Pacific Islands context, large enterprises represent one percent of total. Medium entities--defined as having between five and 250 employees--constitute perhaps 25 percent to 30 percent of total. Micro entities represent 65 percent to 75 percent of firms.  

source: ADB 

In most countries small business might represent 99.9 percent of all businesses. The point is that, depending on definition, “small” businesses are functionally consumer accounts or functionally mid-sized accounts (between 500 and 1,500 employees, for example). 

The “small business” segment might not actually exist, in other words.  

As a practical matter, there are key operational differences between micro businesses and larger businesses. The ability to  cut costs is typically negligible, as a micro business already must operate quite efficiently. Larger firms typically can gain more from cost-cutting measures. 

So yes, there could be a “small business” opportunity in many countries, if the definition used is that “small” entities have 500 to 1,500 employees.