According to recent estimates, there are approximately 20 million small businesses operating right now in the United States. However, given the current state of the economy and predictions that the slumping market might take more time than expected to right itself, many small business owners have been forced to make cutbacks, whether they be layoffs, hiring freezes or the elimination of services, in order to survive.

Despite the challenging times that these small companies are up against today, there are still many opportunities and silver linings for small business owners to capitalize on with the right business model and implementation strategy in place.

As the founder and CEO of Priority Pay Payroll, one of the country’s premier payroll processors, Jerry Carter is intimately familiar with the challenges that beset small business owners during these difficult economic times. After creating Priority Pay four years ago, Carter has successfully grown his company from one small office in Jersey City, New Jersey to nine offices nationwide, generating over $15 million in revenues during that timeframe, all before the age of 30.

So what’s his secret? Having worked for one of the largest payroll companies located in New York City, now a competitor of his, Carter focused almost immediately on learning the daily operations of this large company and soon recognized gaps in its business plan. In 2004, when he launched Priority Pay, Carter executed a business model that would effectively fill in the holes that he saw during his short time at his former company, focusing on the following 5 bottom-line principles as the foundation of his strategy:

1. Do What You Do Best – Don’t Over Extend
More often than not, small businesses have a tendency to over extend themselves by attempting to be too many things to clients in an effort to retain customers. This is a mistake, says Carter. Instead, he suggests that businesses refrain from launching new ventures or new products and focus on its area of expertise, for example.

What Priority Pay offers, says Carter, is an essential service to small and medium sized companies, presenting customized service and expertise in managing payroll taxes, unemployment insurance, health insurance, benefits, direct deposit reporting, etc. By sticking to these services, Carter was able to hone his expertise in the industry and grow his company exponentially over the course of only four years.

2. Niche Markets – Think Outside of the Box
Finding a niche market, one that s relatively untapped, requires out of the box thinking, but is the key to gaining an edge over one’s competition.

Small and medium sized companies may not have the cash flow and expenditure allowances that large corporations have, but they are still willing to pay for quality services that cater to their operational needs. By targeting these small and medium sized companies, Carter was able to tap into a market that was left by the wayside, offering customized paperless direct deposit, tax filing and benefits service packages at a fraction of the cost.

Recognizing that the implementation of an effective payroll system is a necessary element to maintaining the daily operations of any company, Carter sought out small and medium sized companies that lacked the resources and bandwidth to have their own dedicated payroll departments. By offering these small entrepreneurs his company’s expertise in tax laws, unemployment laws and withholding rules and regulations, he was able to supply a service that they demanded but were not getting elsewhere. Thus, though not easily accomplished, finding a niche market and catering to their needs is essential in being successful in today’s turbulent economic climate, maintains Carter.

3. Client Retention - Know Your Audience
However, simply identifying a niche market is not enough to be successful in this economy. In order to attract and retain customers, small business owners must get to know their audience and deliver something that their competition isn’t, whether it be a reduced price for services, bundled packages or one-on-one client attention.

For instance, at Priority Pay, customer service is the company’s number one priority, a promise they make and deliver on to clients on a daily basis. How do they accomplish this?

First, new clients are given a 90 Day Money Back Guarantee, which allows customers to try their payroll service for 90 days and if they are not 100 percent satisfied with the service provided, they will be refunded for all of the paid payroll invoices accrued during those 90 days. In addition, Priority Pay provides clients with a dedicated Payroll Specialist to answer all of their questions. This one-on-one service caters to the needs of smaller businesses and mom-and-pop shops that often lack the resources and employee support to effectively manage the payroll and benefit capabilities that Priority Pay offers.

In knowing and adapting to the needs of one’s audience, excellent customer service will always be provided and customers will remain loyal to such levels of commitment.

4. Know Your Competition - Be Bold, Be Different
Even in niche markets, knowing one’s competition is paramount to successfully driving the growth of a business. Regardless of whether this information is gleaned through first hand experience or by careful market research, small business owners must be willing to get their hands dirty by working hard to unearth the services or products that are not otherwise available in the marketplace, thus differentiating their company from the competition.

Priority Pay Payroll’s competition is national corporations that are both bigger and more recognizable in name than Priority Pay. However, because Carter recognized the needs of a relatively untapped market – small to mid-sized companies – he was able to differentiate his company’s services from his competition.

More specifically, Priority Pay not only provides the same types of services as its competition, but they have a unique pricing model which never charges extra fees for additional services beyond those offered to support their clients payroll needs, including tax filing, direct deposit, check signing, check stuffing, and custom reports. This bundled pricing approach allows Priority Pay customers access to all of the company’s services, which are included in its payroll package, making it easier for clients to pick and choose which services they want without having to worry about price.

Next, Priority Pay guarantees that they will save customers at least 25 percent or more on their annual payroll fees or their payroll is free for one year. And, Priority Pay offers complete, accurate and timely tax filing to all of its clients for no additional fee, as Carter believes that managing a client’s payroll taxes is the primary reason for outsourcing a company’s payroll.

In essence, particularly in today’s economy, small business owners must be willing to go above and beyond what they normally would offer clients in order to survive. This might include bundling and expanding upon one’s services, offering reduced rates for packages or customizing packages to meet the needs of each individual client.

5. Hire Key Talent – You’re Only As Good As You Employees
In every business and across all industries, a company’s worth is only as good as the people that it employs. In a time where customer retention and account management are essential to maintaining a profitable business, it is imperative that small business owners look to hire only the best of breed, requiring a workforce that is experienced, productive and results oriented.

With an unparalleled dedication to customer service, Priority Pay employees are all veterans of the payroll industry, having worked in the field for at least 2 years prior to coming on board. This level of experience about the “ins and outs” of the payroll industry guarantee a level of service that most large corporations can’t offer to clients, finds Carter. By offering a broader talent pool of employees – ones that are ready to answer any and all questions presented to them by customers, based on industry knowledge and experience – clients won’t have a reason to walk away and find better service elsewhere.