2014 Success Study
Hedging Their Bets
According to the fourth annual study, in 2014 even more small business owners - a whopping 77% - feel successful about how their business is operating. This is an increase of 7% over 2013 results.
- 77% of small business owners feel successful (up from 70% in 2013 and 69% in 2011).
- 35% of owners said they feel extremely or very successful, a 52% increase since 2011 (23%).
- 7% of respondents felt the hashtag #norisknoreward best represented the state of their business. Other hashtags used to describe the state of their business right now include:
- #smallbutmighty: 31%
- #prevailing: 18%
- #barelykeepingthelightson: 11%
- #ontherebound: 4%
They define success based on meeting lifestyle needs, profitability and passion for work
When it comes to feeling successful, small business owners value the ability to support a comfortable lifestyle, work they feel passionate about and profitability above all.
- 83% cite making enough money to have a comfortable lifestyle (up from 77% in 2013) and making a lot of money (52%, up from 42% one year ago) as highly important to defining success as a small business owner.
- Others define success as doing something they feel passionate about or enjoy (79%) increasing the profitability of their business (73%) and having the free time to do whatever they wish (70%).
They remain risk averse
Even though more feel successful, the most recent recession continues to have an impact on how small business owners operate their business.
- More than half (55%) of small business owners said they operate their business’ finances more conservatively due to the most recent recession.
- 75% of respondents rated the overall level of risk they are taking with their business as conservative.
- In the past six months, 74% small business owners surveyed have kept the number of risks they take with their business the same.
They’re still not hiring
Similar to 2013 (64%), most small business owners (67%) have not hired anyone in the last year. In fact, even of those who say their business is operating highly successfully, more than half (57%) say they have not hired.
- 67% of small business owners have not hired anyone in the last year, similar to 2013 (64%).
- Of those small business owners who say their business is operating highly successfully, more than half (57%) have also not hired.
- Top reasons for not hiring as much as they would have liked or not at all in the past year were:
- Their business was not growing: 36%
- They can’t afford to hire: 34%
- They are taking on additional responsibilities themselves: 31%
They support a higher minimum wage
By and large, small business owners support an increase in the federal minimum wage. In fact, many already pay their hourly employees above minimum wage and do not anticipate having to take any actions to offset the increase.
- Overall two-thirds (66%) of small business owners favor an increase in the federal minimum wage.
- 51% of owners pay their staff hourly.
- 21% pay staff salary or do not have hourly employees
- Of those small business owners with hourly employees:
- 81% pay above the current minimum wage.
- Two-thirds (67%) favor the proposal.
- More than half (58%) of all small business owners would not or do not need to take any action if the federal minimum wage is increased.
- Top reasons cited by owners who have/would raise their employees’ wages without a state or federal mandate include :
- They already pay above minimum wage
- The cost of living is too high for current minimum wage
- Employees deserve/have earned it
- To be competitive with other companies and attract talent
- One-third (32%) of owners in states proposing minimum wage increases said they would not raise their employees’ wage without a federal or state mandate.
They are less concerned about macroeconomic factors impacting their business
Although small business owners remain cautious, fewer owners are concerned about certain uncontrollable risks that could impact their business.
- More small business owners say healthcare costs (34%), taxes (22%) and slow economic growth (14%) do not represent a risk to their business – significantly higher than 2012 results.
- Less small business owners than in 2012 say these factors represent a major risk to their business:
- Slow economic growth: 56% (down from 67% in 2012)
- Taxes: 40% (down from 59% in 2012)
- Healthcare costs: 39% (down from 53% in 2012)
They find commercial loans are more attainable yet a less desirable funding choice
Small business owners are finding it easier to obtain loans, yet personal sources of funding now rival commercial loans.2
- 46% of small business owners believe it’s slightly or not difficult at all to get a loan or other capital for their business, a 39% increase from 2012.
- While 31% have used commercial sources such as bank loans, bank credit lines or SBA loans to fund their businesses in the past year, 36% have used personal sources i.e. non-retirement savings, retirement savings, such as their 401K, or capital from family and friends.1 Both commercial and personal sources have been tapped less compared to 2012 (54% and 48% respectively).
- Millennial owners (44%) are more likely this year than their Boomer (12%) and Gen X (12%) counterparts to use personal retirement savings to fund their operations.3
They are better informed about the Affordable Care Act
Small business owners feel much more informed about the Affordable Care Act than they did in 2013, but their feelings on the impact the policy will have on their business remain the same.
- 84% say they are more informed about the Affordable Care Act, compared to only 68% in last year’s Small Business Success Study.
- Only 15% say they feel uninformed, compared to about a third (29%) who felt uninformed in last year’s study.
- 39% of owners think the Affordable Care Act will have a mostly negative impact on their business, which remains unchanged from the 2013 Small Business Success Study.
- Those small business owners who think the policy will have a negative impact on their business say they plan to offset the implications by:
- Halting plans for future hiring: 44 percent (up from 37% in 2013)
- Reducing employee hours: 33% (down from 38% in 2013)
- Increasing the prices of products/services: 33% (unchanged from 2013)
- Cutting staff: 31% (steady from 2013)
- Reducing other benefits offered to employees besides healthcare: 24% (steady from 2013)
Small business owners still want to be small business owners!
The majority of small business owners say they would want to open a business much like the one they have today.
- 56% of small business owners say they would open a business much like the one they have today
- 16% would open a different business from the one they have today, and 15% would not open a business at all.
1 In 2014 the wording of the following survey options for this question changed from previous waves: “Credit lines” became “bank credit lines” and “bank” became “bank loans.”
2 Coded responses shown/indicated from an unaided open-end question.
3 Millennial is defined ages 18-34, Gen X ages 35-49 and Boomer ages 50-68.