When opening a small business, the first ideas that come to mind are often stress, financial pain, and a long road ahead. Entrepreneurial burnout is a real issue that every business owner needs to contend with. Entrepreneurial-ism is not for everyone, and even opening a small restaurant comes with a monumental amount of planning and organization.
With all this in mind, the Finimpact Research Team went ahead and decided to poll business owners with regard to their perspective on running a small business in the USA. The July 2019 survey was conducted on a large number of business owners to gain an understanding of what motivates their everyday decisions.
Despite many complaints, it seems that small business owners are one of the most satisfied of all social classes. As it turned out, the reasons for the high levels of satisfaction are manifold, and some of the findings are presented below. Bear in mind that the total percentages might be slightly above or below the 100% mark, due to rounding of the survey results.
#1. Lots of Energy, No Regrets
72% feel that their job affords them enough time and energy. A mere 14% significantly regretted not having enough time to spend with their family due to running their business. This is quite a small figure, and 42% said they did not regret having insufficient time to spend with family.
#2. Permits and Licenses Are Not Really a Problem
28% of respondents believe that permits are out of control – this is quite a small figure and equals the number of respondents who believe that they are not out of control. 42% are mixed about the findings.
#3. Industry is Not Particularly Difficult To Profit In
78% believe that there are industry-specific challenges to be faced, and this is to be expected – all industries are going to face some specific challenges. In addition, only 7% reported that their industry was harder to make a profit in. The remainder indicated that it was either easier to make profits in, or, at least, not harder.
#4. Mixed Views On Educational Qualifications
Business owners tend to look down on educational qualifications a little, though this is not the case for everyone. Business owners are frequently quite “hands-on” and aggressive as opposed to procedural and patient, and their personality traits are typically not aligned with the slow methodology of the education system.
- 42% of business owners believe that educational qualifications are helpful to business success.
- 35% stated that educational qualifications were not necessary or even helpful.
- 21% said educational qualifications help a little.
#5. Freedom is the Main Reason For Opening a Business
Freedom is the most dominant reason for opening a small business. This reflects the dominant personality traits of small business owners and entrepreneurs, who tend to be independent, risk-tolerant, and aggressive, as opposed to dependent, risk-averse, and passive. Business owners and entrepreneurs tend to rank freedom above all else, including job satisfaction.
- At 50%, freedom was ranked as the most appealing aspect of running a business.
- 21% reported money as the primary reason.
- 14% reported prestige as the primary reason.
- 14% reported job satisfaction as the primary reason.
#6. Extremely High Job Satisfaction Levels
Less than 1% of business owners report being truly unhappy with their current economic positions. This is much smaller than the vast majority of other social classes
- 57% reported their job satisfaction levels as high.
- 7% as extremely high
- 36% as moderate.
#7. High Recommendations
78% would recommend other people to start in their business – a good sign for aspiring business owners in the USA.
#8. Loans Hard to Get
Banks are still the best source of funding (71%) with online lenders at 21%. However, only 7% of small business owners say that getting a loan is easy, and 49% described the process as either hard or very hard. At 35%, the biggest difficulty faced by small business owners is reported to be financial access, followed by lack of market access at 21%.
#9. Long-Term Employees Preferred Against Freelancers
While there is a current craze of co-working, co-living, and a new freelancer economy of digital nomads, business owners prefer long-term employees, indicating that they are more productive in comparison.
- 50% of small business owners preferred long-term workers.
- 21% said freelancers were useful in certain instances only.
- 28% preferred freelancers.
Only 28% felt that freelancers were better than long-term employees, in spite of the benefits of not paying for insurance, training, healthcare, or any of the associated expenses of long-term employees.
#10. Local Hires Most Productive.
Local hires and US citizens are the most productive, at 35% each. Obviously, there may be some overlap here, as US citizens are often local hires. Still, it is very telling that only 7% prefer immigrants and 7% prefer minorities, and that only 14% prefer contractors.
#11. Sales and Customer Service Deliver Most ROI
Not surprisingly, sales and customer service deliver the most ROI, at 35% each. 14% reported that marketing delivered the most ROI and 14% indicated that product improvement delivered the most ROI. 7% reported that other fields delivered the greatest return. Less than 1% indicated that employee training delivered the most ROI.
#12. 50% Of Funds Go to Areas Besides Sales, Marketing, and Product Improvement
50% of the total funds go to ‘other costs’, with the rest divided between product improvement (14%), sales (14%), marketing (14%), and customer service (7%). Other costs could include anything from legal expenses, software, rent, utilities, and wages.
If these costs came down, business owners could perhaps spend more money on items that deliver increased return on investment.
#13. US Government Does Not Do Enough
US business owners are not happy with the government, despite stating that permits and licenses are not too much of a hindrance. 64% stated that the US government does not do enough, and 21% said they were actually a hindrance. Only 14% believed that they did enough to help out.
14. Businesses Tend to Have an End Goal In Mind
64% of survey respondents reported that they have an end goal in mind, with 36% reporting that they have no end goal in mind.
Who Were The Survey Respondents?
Of course, a survey is only as good as the type of respondents that answered it. Otherwise, it may easily reflect biases and not provide an accurate picture of reality. The people who responded to this survey were mainly:
- Male (78%).
- Female (21%).
- Aged between 26 – 40 (57%).
- Involved in technology (36%) and food (29%).
21% of owners have been in business for less than 12 months, 42% of owners 1-3 years, 21% between 4 -10 years, and 14% longer than 10 years.
Of the survey respondents, 21% had a revenue above $1 million, 35% had a revenue range between $100,000 – $1,000,000, and 14% had a revenue range between $40,000 – $60,000
So 55% of the respondents had an annual revenue above $100,000 and were mainly male, involved in technology and food industries.
This is important, as it may reflect the viewpoints of these categories of people. It might not accurately reflect the increasing numbers of women entrepreneurs or the levels of satisfaction of other industries, such as healthcare or tourism. It may also not reflect other groupings, such as minorities or immigrants. However, this in no way invalidates the findings, which are consistent and revealing.
Despite not being representative of a wider market segment, the survey alludes strongly to happiness among US business owners, a trend which has always been the case in spite of economic shocks and social upheaval.
The research continually indicates the US business owners are happier than many of their societal counterparts, and that lack of financial access is still the biggest problem for long-term success