Guidant Financial recently surveyed more than 1,000 of its small business owner clients to create a comprehensive State of Small Business Report. This report paints a picture of current small business trends, including who today’s small business owner is, as well as a look at the companies they run. From income to education, and industry to location, here’s what you need to know about who today’s business owner is, how their businesses are performing and what struggles they’re facing.
Who are today’s small business owners?
Our survey revealed that baby boomers are well represented in the league of small business owners, with the largest group of our respondents in the 50 – 59 age range. However, there’s no perfect age for entrepreneurs. Year over year, we saw an 84 percent increase in entrepreneurs age 30-39. This may indicate that younger generations are looking to become their own boss earlier in life.
So, why are more people making the leap into business ownership every year? Thirty-seven percent of respondents indicated their primary motivation in becoming a business owner was dissatisfaction with corporate America. For 30 percent, it was because the perfect opportunity presented itself, and another 28 percent were either not ready to retire or had lost their previous job from being laid off.
Small business owners come from a wide variety of backgrounds and lifestyles, including their educational background. A large majority of our small business owner clients had some college education, but it was more common to have not attended college than it was to have earned a doctorate. Eighty-two percent of Guidant’s survey respondents had an associate’s, bachelor’s or master’s degree, but 15 percent had only a high school diploma or GED. And an even lower percentage had a doctorate degree (3 percent).
What do today’s small businesses look like?
The cost of acquiring a business isn’t as high as many people might assume. Almost 30 percent of our clients paid less than $100,000 for the total cost of their business. This is particularly encouraging for hopeful small business owners, because most entrepreneurs don’t start out as millionaires. About two-thirds of our survey respondents reported that their combined annual household income is less than $150,000 annually.
Though many people picture entrepreneurship as tech start-up, there’s no one way to pursue business ownership. Only 25 percent of our clients said they used funding to launch a new independent start-up. Meanwhile, 40 percent opened a new or existing franchise, and another 31 percent purchased an existing independent business.
Our clients are opening up shop in a wide variety of industries – many of them being service oriented. The most popular industries for small business owners in are food and restaurant; health, beauty and fitness; business services; retail; and home services.
Business ownership is a busy yet fulfilling lifestyle, and our clients are excited about the future. In fact, most entrepreneurs indicated they are looking to expand their business’s operations. When we asked about how additional capital would be spent, the most popular answer was growth. Business owners also indicated they’re hoping to acquire additional staff and new equipment.
Learn more about the landscape of today’s small businesses in our infographic: