What would you do if you knew that almost all your competitors were paying less for their company’s health insurance plan than you’re paying for yours? Or that on average your competitors are generating twice the sales you are? What if you sold lawn equipment and you knew that residents in the town just across the river were spending twice as much on lawnmowers every year than your neighbors are? Might that influence where you focus your advertising efforts, or where you locate your next retail outlet?
Almost certainly it would. But if you’re like most small-business owners, you’ve never had ready access to that sort of information, nor the time or money needed to track it down.
Now you don’t need the money, or even very much time, thanks to a new online tool available via the U.S. Small Business Administration. It’s called SizeUp, and the SBA began offering entrepreneurs free access to it in September. This Web-based tool provides highly specific data on virtually every industry and geographic region in the country, including information on revenues, salaries, health insurance costs, supplier locations and more.
What can SizeUp do for your business?
With a few mouse clicks, SizeUp can show you the above-mentioned data averaged for the competitors in your town, in your state, or across the country. It can show how much money consumers are spending on the goods or services you sell in those regions. It can pinpoint the location of, and provide contact information for, businesses that buy from companies like yours — and for distributors, wholesalers and others who sell the supplies and basic materials your company uses.
All this can be incredibly helpful in deciding where to locate your business if you’re just starting out or expanding. It can be absolutely crucial if you’re putting together a business plan to win financial support from banks or private investors.
More discretely, the wealth of data available from SizeUp can help you decide where to market your business. It can provide clues that you’re paying your employees too much, or too little, relative to your competition. And it can serve as an overall wakeup call if it shows, for example, that your competitors are generating significantly higher sales — or comparable sales with fewer employees.
Arik Levy, owner of Laundry Locker Inc., an innovative provider of laundry, dry-cleaning and shoe-repair services in San Francisco, logged onto SizeUp earlier this year when he began looking for the right place to open his sixth retail location in the city’s South of Market district. “We wanted to see where the competition is, how much people were spending in that area, their average income — things that would help us make a better decision,” he says.
Levy launched Laundry Locker 10 years ago with an innovative approach to a slow-changing industry. His company allows customers to drop off and pick up their laundry at lockers located in hundreds of offices, apartment buildings and kiosks across the city. It also lets them manage their accounts and schedule services online. Levy is now looking to expand his business model beyond San Francisco and license his platform to other entrepreneurs. He’s recommending that they use the SBA’s new market-research tool, too.
Sizing up the benefits of SizeUp
SizeUp was started by Anatalio Ubalde, the successful co-founder and CEO of two related companies: GIS Planning Inc. and ZoomProspector. GIS is an online provider of economic development data used by state and local governments, while ZoomProspector is a corporate real estate and site-selection analysis service.
Ubalde’s newest venture collects industry information from hundreds of public data sources, including Internal Revenue Service records, county courthouse filings, telephone directories, annual reports and more. It pulls demographic data and labor force data from a wide range of public and private sources, including the U.S. Census Bureau, the U.S. Postal Service and other government agencies. The SizeUp database is deep, with information on 14 million businesses.
You can get a taste of what SizeUp offers just by visiting the website and entering the industry and city that interest you. To get access to the full database, however, and to receive periodically updated “competitiveness reports” on your own business, you’ll need to create a free account. Ubalde says the company keeps user contact information scrupulously private, and at least for now doesn’t subject users to any advertising. “We may add advertisements to the website in the future,” he says.
Ubalde encourages owners of small businesses to make frequent use of the site as a way to keep their finger on the pulse of the competition. “Just because you’re in the top 50th percentile this quarter doesn’t mean you might not be in the 30th percentile or the 80th percentile next quarter,” he says. “We constantly update the data. It’s not the type of tool to use just once.”
Levy, for one, is sold.
“I wish this tool had been around when I was starting my business,” he says. “I remember spending hours — days — trying to figure out how many dry cleaners were in San Francisco, where they were, how big the industry was. It was a very painful process, [but] these were questions that were always being asked by investors.”
Now, SizeUp has made finding the answers easier. “Most small businesses, when they’re making decisions, are shooting in the dark,” Levy observes. “A tool like this gives you some fantastic information. It’s an incredible resource.”
SizeUp won’t tell you where you should advertise, how much you should pay your employees, or who you should use as your suppliers. But it will point you in the right direction — and at a cost of nothing, that looks to be a pretty good bargain.
A former reporter for The Wall Street Journal and Dow Jones and contributor to Barron's, Randy Myers is a contributing editor for CFO and Corporate Board Member magazines.
This story originally appeared on Business on Main