It was Small Business Week last week. You know, everyone says how much they value small business in an election year- and does nothing about it. Depending upon how you define small business (a company that employs- with a payroll- one or more people OR include Mary or Tom working 2 hours a month on the side, with a full time job or mommyhood [or daddyhood] taking up most of the time), most small businesses are not incorporated and pay their taxes as part of an individual’s tax return. So, tax rates for corporations have no impact on their bottom line. (Another large segment of “small” business are pass-through entities, which have their profits taxed on an individual’s tax returns, too.) But, that’s not the subject of this post, either.
BankofAmerica, that stalwart supporter of small business (not) has released its first Small Business Owner Report (calling it a semi-annual study!) that explores the concerns and perspectives of small business owners across America. Their potential census included firms with sales ranging from $ 100,000 to $ 4,999,999 and with two to 99 employees on payroll. (I believe this was an excellent census base.)
One of the interesting findings of the study is the stress involved in running a small business. They found that it was thrice as stressful (38%) as raising children (13%) and almost thrice to stay happily married (15%). (Could that be because these business owners have great marriages and children or because they cede that effort to their spouse?)
The study also found that small business owners are optimistic about the future- because of their own decisions and their belief that their local economy is strong. 69% of the respondents understood that the strength of the local economy was more important for their futures than the national economy would be. (This means that most of these companies do not have national exposure.) And, the younger the small business owner, the more likely they were to believe their decisions would help them prevail (66% versus 53% overall).
Most small businesses have no faith in the effectiveness of the US government (75%)- but neither do most other folks given the filibuster mentality of the Senate and the gridlock desires in the House. Health care, transportation fuels, and consumer spending were high among their concerns, with credit availability almost 1/3 lower (at 54%).
On the employment front, it was not too optimistic. 56% expect to neither increase nor decrease their employment, while only 31% expect to add to their payrolls in the next 12 months. If this were indicative of the small business sector [the ones that HAVE employees, not the side businesses], it would mean an average of 100,000 new jobs would be created monthly for the next year . (Of course, we have HP killing 30,000 jobs in one fell swoop.)
The other key point is only 27% of small business owners consider themselves financially savvy, and need outside help. (Our phone number is Seven Oh Three.548.1343 and we are available 24 X 6).
47% of small business owners understand that marketing is critical; they need to acquire new customers for revenue growth, with 14% aiming to increase sales to existing customers. (Actually, both of these are critical concerns- and our phone number is still listed above.) Only 38% of the owners are using social media to contact customers or to offer discounts and deals to their customer base- even though 64% wished they leveraged technology better.
Interesting statistics Roy. I believe that it is very stressful, but I’m not sure about it being that much more stressful than raising kids – I guess it depends on who you ask! I love how you subtly (not) slip in your phone number – lol!
Suerae Stein recently posted..Pretty in Pink
I am with you, Suerae. I made my parenthetic comments immediately after quoting the data BankofAmerica provided.
Interesting, Roy. I admit, I didn’t know last week was small business week-too busy taking care of business.
It makes me wonder if it’s the addition of employees that add that stress. LOL! As you know, I spent 30+ years in Corporate America. The experience almost killed me. I take responsibility for that.
Although being a business owner is indeed stressful, for me, it’s nothing compared with my corporate life. But then I work alone. I am adamant that I do not want employees. Connection? You be the judge.
Cathy Miller recently posted..Peeking Inside the Techie Folder
That is exactly what makes the world go round, Cathy!
I don’t think there is a connection between being an employee and not wanting to be an employer, though.
There is something wrong with how these people are answering the questions about stress. If raising kids were less stressful, fewer kids would be in prison. If being happily married was less stressful, there were would way fewer divorces. That said getting, having and keeping a job are so stressful that people commit suicide over it (as they do about the other two as well). * would be way few divorces
Ann,
I’m with you. Notice my parenthetic remarks that I believe they are either not very involved in raising their kids- or have great spouses.
However, I am not sure where your concept that folks commit suicide about getting a keeping a job is much more grounded, either.
Roy
Lip service, interesting figures but…what does it really mean Roy? Great plug for financial assistance to SMEs.
Roy, world wide small business is important. In NZ more than 90% of businesses employ less than 10 people. And turnovers range from the median income to billions. There are a couple of linkedin discussions looking at both the needs of small business and redefining SMEs but either way, SMEs form an important part of the economy and those micro businesses that add a few dollars to the household income are often the difference between fruits and vegetables and scurvy never mind one or two luxuries like wine and candy.
Roberta Budvietas, recently posted..7 tips about Business and Time
Roberta, I am not saying that folks working on the side- part time, after hours, whatever- are not generating funds for their family or themselves that are not critical or useful for that family. What I am saying is that from point of view of the overall economy, they are barely a blip. And, since they don’t employ folks, they don’t have any effect on employment. So, their opinion on employment issues or corporate taxes and how they affect business issues are abstract, at best.
You make some very good points, Dr. A. As a-I won’t say small I’ll say microscopic-business owner it gives me a lot to think about. I’ll say I fall into the category of not having much faith in the government. I do, however, understand the power of social media and marketing…without both of which I’d be stagnant. Great post, as always!
Lisa Brandel recently posted..Magen David by Lisa Brandel
You will like Monday’s post, Lisa… It will provide a slightly different result (mostly because 30% of the respondents are part-time solopreneuers..