Editor's note: The following is part of a series of stories that takes a deep dive into the demographics and firmographics of small and midsize businesses in the United States. The findings are derived from surveys distributed from November 2010 to January 2011 to 2,223 owners of businesses with less than 500 employees.

Bigger is not always better, at least when it comes to those business owners who lead operations with four or fewer employees.

They present a different “face” than owners of larger companies (five to 499 employees). They are less concerned about appearing financially successful. They are more understanding of the power of local involvement.

And they're not an inconsequential market: The companies these business owners lead represent 56 percent of the small and midsize business market and total 4.06 million businesses nationwide. However, even though these small companies account for the majority of businesses, their spending potential is considerably less.

Godfrey Phillips, vice president for research for American City Business Journals, talked through some of the key results of this year's research into the demographics and firmographics of the SMB market. Phillips developed the findings with lead strategist Jessie Shaw.

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