There are 5.9M companies in the US with fewer than 2,500 employees. But 14% have no employees (just owners), 61% have four or fewer employees and 37% have 5-99 employees. Warrillow does a brilliant job in blowing up the “SMB” into actual segments and delineating some very sharp differences between them. Warrillow presents three useful archetypes that help us understand business owners.

Mountain Climbers are business owners who are driven by growth and achievement. Though they represent only 2% of the SMB, according to Warrillow, they spend much more than the other two combined. They typically have 5-50 employees and grow 20% a year. I believe my friend Raymond Mendoza who runs Short Circuit Audio Car Repair is a classic “mountain climber”.

Freedom Fighters are owners who value independence above all else. They dislike being told what to do so owning a business is an alternative to the climbing someone else’s corporate ladder. They make up 24% of SMBs and consist of 1-50 employees with growth of less that 20% per year. They are ruthless in balancing work/life demands. As founder of Pacifica Group, I consider myself a classic freedom fighter.

Craftspeople are independent professionals who apply their expertise independently rather than working for a company. They make up 74% of the SMB. Warrillow calls them the “un-entrepreneurs” because they do not see themselves as business people but rather as gurus/experts. Crafstpeople typically work alone in a small office/home-office (SOHO) or with a few part-time helpers.

Warrillow urges readers to apply four principles when targeting small businesses.

1. Forget about the small business market: basically, he urges us to analyze the target customers and look for commonalities based on other more relevant dimensions such as demographics, geography, number of employees, psychographic traits, profit potential, etc.

2. Find an aggregator: chances are there is already a company that is selling to (retail/distributors), communicating with (associations), or assembling together (events), the market you also want to serve. Hookup with them instead of going direct.

3. Speak their language: small business owners hate being seen as small business owners. They want to project a larger image to convey credibility and safety to their clients/customers. Avoid such landmines by tuning into their psychology.

4. Find a simulator: small business owners live and die by their customer service so they will place equally high demands on their vendors. Find cost-effective ways to provide high touch experiences.