About the study
Vistaprint empowers more than 17 million small business owners globally to professionally promote their businesses. To better understand the lives of its customers, Vistaprint carries out regular studies of the people behind these businesses, in order to shed further light on their motivations, success factors and challenges.
The following study explores the entrepreneurial ambitions of the American public, and compares the perceptions they have around running a business with the reality experienced by current small business owners.
The study is based on a survey of 1,000 American adults from the general population and 500 U.S. small business owners (0-10 employees) conducted in December 2017. The survey was carried out by OnePoll, ESOMAR member, on behalf of Vistaprint.
The New Year is synonymous with resolutions and promises of making changes – from exercising more and eating healthily to learning new skills and spending more time with family. It is also a time when many professionals reflect on their career achievements and goals, and may question whether their current role is providing true fulfilment.
As we move into 2018, Vistaprint reveals how many Americans are considering entrepreneurship as an alternative career. This study explores their reasons for becoming their own boss, the barriers to starting up and their overall expectations of going it alone, while comparing these with the reality experienced by current business owners.
At the end of the report, there are five key takeaways for aspiring entrepreneurs based on advice from current business owners.
A nation of entrepreneurs?
At least in theory, it would seem the American dream is alive and well. Our survey reveals that three in five (62 percent) of Americans have desires to own a business.
This desire is correlated with age. Of American millennials (aged 25-34), 77 percent say they want to set up a business or work for themselves, while this figure is 65 percent for those aged 45-54. There is also some gender disparity, with men more likely to consider entrepreneurship or self-employment than women (69 percent vs. 59 percent).
Small businesses form the backbone of the economy, strengthen local communities and provide significant value to their customers, so it’s encouraging to see so many Americans would like to start their own companies. Through our research, we hope to support the next generation of entrepreneurs, by shedding light on the motivations for starting a business, and the success factors, challenges and rewards of striking out on your own – based on the experiences of current owners.” – Trynka Shineman, Vistaprint CEO
The barriers to starting up
While most Americans are interested in becoming their own boss, just one in seven (14 percent) believe starting a business is a realistic goal for 2018. So, what is holding them back from taking more immediate action?
The research found financial concerns and worry over how their business will be funded are the biggest barriers to making the leap, with 51 percent and 39 percent of the public choosing these options. Preference to work for an established company is least likely to deter the public (9 percent) from following their dreams.
Aspiring millennial entrepreneurs were even more concerned than baby boomers about lack of access to funding (45 percent vs. 33 percent), failure (34 percent vs. 19 percent) and financial/job security (21 percent vs. 9 percent).
Reasons to go it alone
Entrepreneurship can be a lonely and challenging journey, where people may be leaving the security of a full-time job and regular income to a heavier weight of responsibility and potentially higher levels of stress. What drives business owners to make these sacrifices?
The study revealed that for current business owners, the yearning for a better lifestyle trumps the desire to make more money. The ability to be in charge of your own destiny (66 percent) and work flexibly (55 percent) were the top two reasons owners provided, while financial independence (44 percent), added satisfaction (43 percent) and improved work/life balance (39 percent) round off the top five.
The reasons owners gave are similar to the perceived advantages of being your own boss, with aspiring entrepreneurs also citing the lure of being in charge of your own destiny as the number one appeal of business ownership (51 percent). Interestingly, the prospect of making more money was the 5th cited reason (37 percent) for those who have yet to make their business a reality.
There were also some interesting generational differences between current business owners, with millennials placing more emphasis on making money and pursuing their passion as reasons why they started their businesses.
There were few significant gender differences in the reasons for business ownership, but female business owners were more likely to select work/life balance as a reason for going it alone than men (47 percent vs. 31 percent).
While the responsibility of running a business can be overwhelming, this sense of ownership is also a key motivator for aspiring and existing entrepreneurs. Small business owners are the masters of their destiny, reaping the benefits of their own efforts while taking full control over the future direction of their business.” – Trynka Shineman
Recipe for success
With fear of failure a top barrier to starting up, many aspiring entrepreneurs will be wondering if they have what it takes. Are there certain characteristics that influence success?
That is certainly the perception. Business owners say being hardworking (80 percent), self-confident and intelligent (65 percent) are the top personality attributes that have helped them to successfully run their businesses. Being persistent (62 percent) and having a warm/friendly personality (59 percent) were also commonly cited by those who have made the leap, while ruthlessness was considered the least important personality trait, cited by just 6 percent of current entrepreneurs.
Americans aspiring to run their own businesses placed equal importance on hard work, cited by 76 percent of respondents. Next on the list were persistence (65 percent) and risk-taking (61 percent). Interestingly, those who actually took the risk of starting up did not even include ‘risk-taking’ among their top 10 traits.
Here are the top five personality characteristics for success according to current business owners, split by age and gender. Hardworking ranks as the number one personality trait across all segments:
It goes without saying that small business owners have an incredible work ethic. Their hardworking, persistent and resilient nature is born out of an unrelenting passion for what they do. It’s this passion that gets florists to the flower market at 3am, inspires craft makers to experiment with new products and encourages all small business owners, regardless of their industry, to go the extra mile to keep customers happy.
It was interesting to see that business owners don’t necessarily see themselves as risk-takers, when this is very much the public’s perception. There are many ways owners can minimize the risk of striking out alone. For example, by trialing a product or service prior to launch, or even running a side business first to assess whether there is sufficient demand on a larger scale. But above all, choosing a business idea that you’re truly passionate about will give you the will to keep going in the face of setbacks and challenges.” – Trynka Shineman
When it comes to the difficulties of running a business, finance issues were deemed the most common struggle by business owners (17 percent). This was followed by difficulties in being effective with their marketing and advertising (13 percent), sales and hiring/staff related issues (10 percent).
Marketing/advertising also emerged as the area people who have yet to build their business worry they will struggle with the most (39 percent). Next on the list were finance (38 percent), networking (33 percent), sales (31 percent) and technology (29 percent).
Most people start businesses to make a career out of doing something they love, rather than due to a passion for finance or marketing. When owners wear many different hats and work within the constraints of a tight budget, it’s understandable that these two areas become the biggest struggles on their to-do list. Almost all small business owners will face challenges in finding money to start or grow their business at some point in their journey, while knowing how to target, acquire and retain customers is key to achieving business goals.
For both financing and marketing, having a clear business plan is critical. This could be as simple as a two or three-page document that describes who your target market is, what makes your business unique, how you’ll get started and what your measures of success will be. You should also carry out a realistic assessment of the true costs for your first few years, so you can anticipate how much capital you will need.
From working with small business owners, we have learned that the best approaches to marketing are built through experimentation and adaptation. Through being creative and adaptable you can test different marketing tactics, and find the ones that best meet your goals. There is also a wealth of free resources and advice out there to guide you towards the right marketing decisions, helping you maximize your investment.” – Trynka Shineman
Risk vs. rewards
So, is it worth aspiring dreamers making the jump?
There’s no doubt that running a company comes with a heavy workload, and a third of business owners said starting up was even harder than they anticipated. Millennial entrepreneurs were most surprised at the level of work required to get their business off the ground, with over half (56 percent) saying it was harder than expected.
Overall, aspiring entrepreneurs are realistic about how much they’ll need to work to start and build their businesses. While Americans from the general public work an average of 43 hours per week, they would expect to work 48 hours as business owners – the exact same number the U.S. owners we surveyed actually work. However, some are putting in very long hours, with more than one third of business owners (37 percent) working over 50 hours per week.
It seems that the risk and hard work is worth the reward, as nearly two thirds (62 percent) of entrepreneurs say being their own boss is more satisfying than they ever expected, with just five percent experiencing less satisfaction than was hoped for.
Millennial business owners report the highest levels of satisfaction, with over four-fifths (81 percent) saying that running a business is more satisfying than they imagined it to be.
Starting a business has been even harder than I anticipated. The baked goods industry is a crowded market and there’s so much more to it than having a good product. You’re the boss, so you need to solve all the problems. The smallest things can go wrong and derail you, so you must be good at thinking on your feet and putting that train back on track!
Last year we grew significantly, and while this is highly rewarding it’s taken a toll on me. I missed a big family event this year due to our largest, most high-profile order, which was a wakeup call. This year, I’m focused on taking one day off a week for my sanity and for the sake of the business. I picked a day when I can’t really do anything to move my business forward, and I’m hiring someone to cover events or markets that may fall on that day.
My one piece of advice to anyone who wants to start a business is that you have to genuinely love what you do. It varies by industry, but I launched Top Shelf Cookies knowing that it would be very hard and take a long time to make money in the food business. So, not only do you have to love what you intend to do, but also the idea of building it from scratch.” – Heather Younger, Owner of Top Shelf Cookies
Current and future performance
In terms of performance, six in ten (62 percent) business owners say their business is as successful as they expected it to be, although one in four owners (25 percent) feel it’s not gone as planned. If we get more specific about performance, half of the owners surveyed (50 percent) say their company grew in 2017 versus the year before, while only 16 percent reported a decline in growth. When it comes to 2018 performance, two-thirds of business owners anticipate a better year, with over a fifth (22 percent) forecasting a much better performance this year.
Millennial entrepreneurs were most likely to report growth in 2017 (73 percent), and are also the most confident, with 44 percent expecting a much better performance in 2018. Female entrepreneurs were also more likely to report 2017 growth than men (55 percent vs. 45 percent).
Our study reveals that most Americans have ambitions to be their own boss, but are being held back by certain barriers – with financial concerns and lack of access to funding the main reasons.
The survey clearly shows that the public’s perceptions of running a business are similar to the reality experienced by current business owners. Both current small business owners and aspiring entrepreneurs are more motivated by the freedom of being their own boss rather than desire to make more money. Being hardworking is also the most valued personality characteristic of successful entrepreneurs, by both current business owners and the public. This is supported by data on the actual and expected working hours of business owners – who are working on average five hours a week more than full-time employees. In terms of the actual and perceived struggles of being a business owner, finance and marketing were ranked the top two areas.
With expectations of running a business largely meeting the reality, people with genuine ambitions to become their own boss need not be afraid to make the leap. After all, those who are already working for themselves would argue that it’s well worth the challenge, as the majority report high levels of satisfaction and are optimistic about their company’s future performance.
Bridging the gap between employee and entrepreneur
We asked current small business owners to provide their one piece of advice to anyone who wants to start a venture of their own. Here are the five key takeaways for aspiring entrepreneurs to consider:
1. Never give up – Whether you’re just starting out or thinking about launching a company, you will encounter setbacks in the early stages – from naysayers who plant negative thoughts in your head to a lack of funding opportunities. Have confidence in your idea from day one, be patient and never give up.
2. Embrace the challenge – As an aspiring business owner, you must be prepared to dedicate the vast majority of your time to your company, particularly in the start-up phase. This could come at a cost to time spent with friends and family, and for an initially limited financial return. But current business owners would also overwhelmingly agree that these sacrifices pay off.
3. Be prepared – The work should begin long before you launch your company. Before diving into business ownership, carry out some research to determine that there is a genuine market for your product or service. Be ready to pivot if your first idea doesn’t look like it’s going to succeed. Ensure you work through all the ‘what if’ scenarios and how you plan to address them, whether they’re related to finance, law, technology or competition. All of this should be captured in a comprehensive business plan, which you should review with peers to get an outsider’s perspective.
4. Count the costs – As well as working out your exact overheads through careful planning, you should also ensure you have enough cash saved to tide you over in the early stages and downtimes. Live below your means and have realistic expectations about how much revenue your business will make in the first few years.
5. Pursue your passion – Doing all the above will come more naturally if the business you’re planning to run is something you’re genuinely passionate about. Your business is a reflection of who you are, and your customers will be able to recognize the passion that you bring to work every day – whether its spending that little bit longer creating the products they buy, or going the extra mile to keep them happy.