Lately, the VoIP industry is presenting a world of opportunity for business professionals who offer VoIP and similar products. Thanks to more businesses needing remote and cloud communication solutions, the market is projected to spike from $69.3 billion in 2020 to around $145.8 billion by 2024. It may even surpass $145.8 billion due to the impact of the global pandemic on in-person work life.
However, what many VoIP professionals don’t realize is the opportunity in small businesses. Though small businesses typically don’t require as many phone lines compared to larger businesses, they are rapidly flocking to VoIP in recent years. This is presenting a huge opportunity for VoIP providers to grow their business if they quickly take advantage. Make sure to consider these 6 reasons to target the small business market as soon as possible.
1. A large majority of U.S. businesses have 5 employees or less.
Did you know that the large majority of businesses in the U.S. have 5 employees or less? Nearly 75% of all companies in the United States are made up of 5 employees or less. That’s a whopping 13.5 million businesses. And what’s more, they’re all in need of cost-efficient, flexible phone system solutions. If your business model targets only medium to large sized businesses, or even small businesses with 5 or more phone lines, you’re only connecting with 25% of the market. That’s tons of potential revenue you’re missing out on. If you’re looking to grow your business, you can’t afford not to connect with companies with 5 employees or less.
2. VoIP growth rate is strongest for small businesses with fewer employees.
About one third of all businesses in the U.S. currently use VoIP systems. And a majority of these are small businesses. Reports show that small businesses are the quickest to adapt VoIP solutions. This isn’t surprising, since VoIP offers small businesses with few employees the solutions they need. It’s budget-friendly, scales with the business, and supports remote work.
It’s projected that VoIP solutions will grow by 15% for small and medium sized businesses by 2025. This trend is the most predominant with small businesses with fewer employees, who need to communicate while on-the-go. Start targeting the small business owner who takes on several different roles, has to be in many different locations throughout the day, and doesn’t have the budget or need for a complex phone system. Your VoIP solution will sell itself.
3. Small business owners are switching to remote work.
Speaking of remote work, as of 2018, 70% of business professionals around the world work remotely at least once a week. Many of these are small businesses. For many businesses that operate with 5 employees or less, it just doesn’t make sense to operate from a central location. And considering the impact of the global pandemic, this trend is likely to persist even more so. In fact, 57% of small business owners plan to retain work from home after the pandemic is over. This likely means they will need a reliable, sustainable VoIP solution.
4. Boost your brand awareness.
If you are looking to grow your VoIP company, you need to focus on boosting awareness around your brand, not just closing more deals.
We find that many VoIP providers are focused on the size of each individual deal they close. As a result, forget about the profitability of small businesses. The more businesses that know your brand, the better. As mentioned, the large majority of businesses in the U.S. are small businesses with less than 5 employees. If you ignore this demographic you’ll confine your brand to a small piece of the market and likely won’t see the growth you’re seeking. Consider the top VoIP providers that own the most market share in the U.S. such as Microsoft and Vonage. Part of the reason these companies are so successful is because they target all businesses, not just large ones.
5. They present a strong opportunity for lifetime value and growth.
Small business owners and start-up companies have a common goal – to grow their business as quickly as possible. VoIP solutions are so appealing to small business owners because they are budget-conscious and can scale with the business as it grows. Professionals who are starting their own company have enough expenses to deal with. They likely don’t want to invest a fortune for a hosted phone system. A VoIP system will grow with the company and scale itself naturally. This will give your company the opportunity to create a stronger lifetime value in these customers.
Ooma is a great example of a VoIP provider that maximizes their revenue by catering solutions to small business owners. We have many clients who report a stronger lifetime value and higher profit from partnering with small businesses looking to grow. Small businesses that are just starting up will choose a VoIP provider that fits their business needs. Then, they stick with the service as they scale, meaning more revenue for your VoIP business as they remain loyal customers.
6. You can automate small business sign-ups.
From working with VoIP providers for over 10 years, we understand why some are resistant to focusing their time and energy on smaller companies. Each deal consists of less revenue compared to larger companies. Plus, they can take just as long to close as bigger deals. But because small businesses represent such a large pool, if you can find the right business model to market to them while spending less time and money, they can be extremely profitable.
The best way to market your product to small businesses is to make it as seamless and effortless as possible on your end to sign them up. Using an e-commerce model, you can entirely automate the sign-up process for smaller businesses. This can include signing up for your service, shipping, “plug-and-play” options, etc. The idea is for you to passively gain more business from smaller companies without draining your internal resources.
If you are a VoIP provider looking to grow your business, make sure to take advantage of some of our other free resources:
- Why Using a Digital Marketplace to Sell is the “Next Normal”
- Virtual Selling: 6 Steps for Selling When You Can’t Be There
- Why To Invest in Non-Branded Marketing
- How to Build a Great Sales Team
If you are looking for a reliable way to grow your business and improve sales, let’s talk. We generate 300-400 leads per month who are looking for a VOIP system.Take a look at 360Connect’s solution for businesses or get in touch with us to discuss our available opportunities.