Marketers prospecting small-businesses files who suppress the addresses of newly incorporated companies to avoid risk may be missing a huge part of their potential market, according to a study Experian is expected to release today.
In a study of 1.2 million incorporated and unincorporated “micro businesses,” or those with fewer than 25 employees and less than $10 million in annual sales, Experian determined that incorporated small-business owners make more money, are more educated and have more drive than their unincorporated counterparts.
Business-to-business marketers will often purposely avoid mailing to newly incorporated companies because of the high failure rate of start-ups, according to Denise Hopkins, senior director of Experian’s business marketing solutions.
“Incorporated micro-business owners have more purchasing power and less risk than you might expect,” said Hopkins.
The incorporated business owners in the study had incomes 35% higher than the general population, compared to unincorporated business owners who had incomes 24% higher, the study determined.
Also, the study found incorporated small-business owners are 56% more likely to have completed college than the general population, compared to their unincorporated counterparts, who are 29% more likely.
Incorporated business owners are also 94% more likely to exhibit “work hard, play hard” attitudes than unincorporated business owners, according to Experian.
In other findings, incorporated business owners tend to be younger and more active than their unincorporated colleagues. They also tend to live in areas where ownership of European and Asian cars is higher than the general population, and are less likely to have a “buy American” attitude, according to the study.
Unincorporated businesses are much more likely to be agricultural than incorporated firms, the study said.
