There’s a veritable gold mine for companies that study and collate information about small business owners and entrepreneurs. After all, every one of them is a likely source of either good news or bad news and many – if not all – of them are looking for an edge in their own operations.
As a result of this never ending stream of content, companies that cater to the small business owner can offer valuable insight into what makes some owners successful and others close their doors.
A study that I recently read took a different tack on the usual demographics conversation, though. Instead of looking only at the usual “age, gender, and company data” and then, trying to extrapolate information from there, relying on statistics to dictate demographics instead of taking the time to understand motivations, this market survey looked to classify small business owners based on what they actually thought.
I liked it and I thought I’d share the particular classifications with you.
The company that actually conducted the survey was a small business software company out of Arizona, Infusionsoft, and the Small Business Market Survey also took the novel idea of getting the data first, then classifying the answers second.
This led to four distinct profiles of small business owners:
- Passionate Creators (25 percent)
- Freedom Seekers (23 percent)
- Legacy Builders (28 percent)
- Struggling Survivors (24 percent)
The Passionate Creators opened their business out of love for what they do and believe that their passion is the defining quality of their success. Running their business gives them a sense of accomplishment and pride and when asked about their goals as a small business owner “doing the work I love” was a top achievement for this group. Forty-eight percent of Passionate Creators stated they had always known they would run their own business. Seventy-three percent of the business owners within this profile identified themselves as “entrepreneurs”— more than any other profile.
Freedom Seekers started their small business because they value the ability to control their work experience. They want to be in charge of their schedule, career path and work environment. When asked about their goals, this group was up for anything and everything that liberated them from the shackles of a confining corporate experience. The survey found that 68 percent of these freedom-loving small business owners rated “living the life I want” as their top success metric. They also held strong to their free-seeking roots when it came to any other reasons for owning a small business:
- 57 percent do it to find flexibility in their schedule to spend time with their family
- 52 percent want to be in control
- 42 percent want the flexibility in their schedule to travel
The small business owners in this profile made it clear over and over that they had no desire to be chained to 9-to-5 schedules or trapped beneath a glass ceiling.
This troop wants things simple and manageable. Forty-five percent of them are the only employees in their business, and they are the least likely of the four profiles to have more than one other employee. Not surprisingly, they cite, “time to get everything done” as their biggest challenge. In tackling the challenge of chasing daylight, they have adopted automation.
Business owners within this profile believe small businesses are more ethical and vital to the economy compared to larger corporations. This group started their business to bring something new to the marketplace—something no one else offers. They are practical in their approach to business ownership in that they saw an opportunity and went for it. Business ownership provides them with a sense of stability for their future and the future of their family and they have created a business to help secure their retirement or hand down to their children. For these reasons, many of them take tremendous pride in the businesses they have created and are in it for the long haul.
Legacy Builders are committed to making their business successful and ensuring it provides the stability and financial support they expect.
- They are laser focused on their business: 80 percent run only one business.
- They are here to stay: Only 26 percent have considered closing and only 24 percent have considered selling their business.
The Struggling Survivor profile represents the cold, hard truth of business ownership: sometimes running a small business is scarier than it is rewarding. A whopping 53 percent have considered closing their business.
Regardless of business model, tenure or experience, most small businesses are familiar with the fear of failure, but that fear is deeply rooted in this group and they face the very real challenges of ownership every day. Struggling Survivors said they have significant concerns, misgivings and doubt about the value of owning a small business. They acknowledge that corporate jobs are more secure, and even go a step further to admit that you have to be a little crazy to start a business. Time is the top challenge for every profile, but more than any other profile, the Struggling Survivor struggles with managing the day-to-day operations of their business.
Struggling Survivors are the least likely group to report reaping the benefits often associated with entrepreneurship—financial security, more time with family and friends and an improvement in their attitude and outlook. They are the least optimistic about the prospects for their business each year, with only 20 percent saying they will do much better than in the previous year.
They are jack of all trades, masters of none: 51 percent run their business alone. They are spread too thin wearing most of the hats within their business with a to-do list that includes:
- 80 percent handle administrative duties
- 89 percent manage sales
- 85 percent tackle marketing and advertising activities
- 84 percent take on customer service
- 68 percent are in charge of financial tasks
- 72 percent are responsible for managing vendors
- 61 percent provide their own website content
- 62 percent are performing IT and technical duties
They are in the deepest throws of the small business struggle and feel disrespected by peers, and even unsupported by family members. Yet, even with a perceived lack of support, their never-ending to-do lists and the uncertainty they feel about owning a small business, they are the most likely of the four groups to volunteer in their community (34 percent). And, despite many of them having seriously considered throwing in the towel, they continue to work towards their dream of independence and security.
Who are you? Does it matter?
It does! More importantly, every one of these types of owners needs the help of a professional team – at the very least to handle tax preparation. As always, my team and I are here to help – so don’t hesitate to reach out to us or come in and discuss how we can make entrepreneurship easier for you.