The big picture on small business

Survey reveals small business trends, challenges, gender roles, and more in 2019

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Did you know that more than half of Americans either own or work for a small business? Moreover, those small businesses create about 2 out of 3 new jobs in the U.S. each year. So what drives businesses like these? What are the peaks and pits of owning a small business?

 

TSheets by QuickBooks decided to dig a little deeper into the small business realm by surveying self-identified small business owners (an overwhelming majority of them with zero to 10 employees) and asking them about their biggest hurdles, funding, and even gender roles.*

Competition is the biggest obstacle for small business owners

With 46% of surveyed business owners being established for just three years or fewer, one might assume cash flow is their biggest problem. But there’s a much bigger beast in the way of small business owners—each other!

The top 5 challenges small business owners face in 2019:

  1. Competition
  2. Cash flow
  3. Paying taxes
  4. The economy
  5. Growth

For small businesses that have been operating for less than a year, 35% have seen a loss in profits, and 30% have broken even. But for the rest, just 11% have seen a loss in profits, and 38% have seen a profit of under $50,000.

And that’s where it seems to plateau for small business owners. Even the majority of well-established businesses—we’re talking those that have been around for more than 50 years—don’t see profits of more than $50,000.

 

30% of small business owners are living the dream

So if money is seemingly not a motivator, what drives small business owners to take on this uncertain adventure?

What small business owners were doing before they became entrepreneurs:

For 40% of respondents, owning their own small business is simply them living out their dream. For another 27%, their bold business venture is because they were so fed up with their last job, they decided to take matters into their own hands. One person even hinted at lack of integrity at their previous job: “I was tired of working for insurance companies that made unrealistic demands and didn’t allow me to shop for the best product I could find for my client.”

Top 5 things that motivated small business owners to open up shop:

  1. It has always been my dream
  2. I was fed up with my job
  3. My side hustle grew
  4. I saw a need for my product/service
  5. I inherited a family business

For nearly half of those surveyed (45.64%), it was perhaps easy enough to start their own biz because they had no kids. But for a quarter of that 9% who listed “other” as a reason for starting up their company, family played a large part, saying their choice was influenced by wanting to spend more time with their children, helping out their spouses, or having more flexibility for family.

Female business owners primarily responsible for household

Nearly 30% of small business owners run things with their spouse or significant other.
The majority of female respondents who run their businesses with their male spouses are responsible for marketing, customer service, and accounting. Meanwhile, their male counterparts are, in a majority, responsible for sales, technology and business deals.

But what about those responsibilities lurking at home, away from the office? Well, it looks like females are still in charge of those, too. Female respondents who run a business with a male counterpart said they are primarily responsible for basic errands, meal preparation, caregiving, and household chores.

More women than men get the funding they ask for

Gender also seems to come into play with funding. 71% of respondents who asked for funding needed it to help the business grow. Another 7% said it was to run payroll, and another 7% said funding was needed to pay back debts.

The interesting part lies in who actually got the funds they needed. 36% of females who asked for funding got all of it. Conversely, only 24% of males that asked for funding got all of it. 42% of males who asked for funding got none of it, compared to 35% of females.

But when it comes to ease of acquiring funds, women seem to have fewer difficulties in getting what they ask for. 25% of females said getting their funds was easy, but just 19% of males said the same.

And perhaps it’s because of that imbalance that men are trying to find more neutral ways to do business. While an overwhelming majority of respondents (91%) said they have never tried to disguise their gender in business communications in hopes of better business results, that means 9% have. Male respondents seem to do it more than female respondents: 11% of males versus 8% of females. Additionally, male respondents also sought funding more than female respondents, too: 29% versus 23%

46% of small business owners don’t have a business degree

Since many small business owners are living out a dream and forgetting all about their former jobs they were fed up with, how many of them have an actual business background? Not many, according to our survey.

46% say they don’t have a degree in business, and another 32% said while they can’t boast a business degree, they have taken some business classes. Just 9% have a bachelor’s degree in business. And only 3% are overachievers with either a master’s or a Ph.D. in business.

Still, confidence levels are high among all types of business owners, no matter their scholarly background. 53% of those with a bachelor’s degree in business felt very confident in their abilities as business owners, compared to 48% with no formal education. Yet, regardless of formal education, Google seems to be the best business mentor.

Where do you turn when you need business advice?

Even for those who are running a biz with their significant other, 26% are still turning to the internet first for advice. But when it comes to personal support during rough patches, 33% lean on their family or significant other, 20% rely on friends and 10% turn to their faith community.

Small businesses are for anyone

Simply put, small businesses don’t discriminate. They’re for anyone. You can have a business degree, a family, run your company with your spouse. For small business owners, the reward isn’t necessarily monetary, if at all. It’s finally finding a work-life balance solution. It’s breaking free from corporate chains. It’s doing what you love every single day.

For more on all-things small businesses, check out the Small Business Administration. For more small business resources, check out the TSheets Small Business Resource Center.

Full survey results

What do you consider to be your business size?
Small - 100%
Medium - 0%
Large - 0%
Freelancer/contractor - 0%

 
What is the average number of people employed by your business over the last 12 calendar months?

 
How long has your business been established?

 
How much profit did your business make in the previous financial year? (USD)

 
What were you doing before you became a business owner?

 
Select the following statement that most describes the reason you decided to become a business owner
It has always been my dream - 30.94%
I was fed up with my job - 20.84%
My side hustle grew - 18.30%
I saw a need for my product/service - 17.57%
I inherited a family business - 5.37%
Other - 6.97%

What are the three biggest challenges you face as a small business owner? (percent answers)
Competition - 18.54%
Cash flow - 11.55%
Paying taxes - 11.38%
The economy - 11.18%
Growth - 10.14%
Providing healthcare benefits - 5.79%
Government regulations - 5.63%
Staying passionate - 5.30%
Online retailers - 4.93%
Paying employees correctly - 4.80%
Retaining good employees - 4.51%
Hiring new employees - 2.32%
Product theft - 1.16%
Time theft - .91%
Other - 1.86%

 
In your business communications, have you ever tried to disguise your gender in hopes of better business results?

 
Have you ever sought funding for your business?

 
Why did you need funding?

 
Did you receive the entire amount of funding you asked for?

 
How easy or difficult did you find the process of seeking out funding?

Do you run your small business with your spouse/significant other?

 
Please select your significant other’s sex
Male - 53.92%
Female: 45.77%
None of the above - .31%

 
Who primarily takes care of the following business needs?

 
Who primarily takes care of the following family needs?

Do you have a degree in business?

 
Where do you turn to when you need business advice? (percent answers)
I use the internet - 25.79%
I turn to other business owners - 19.32%
I read books - 14.34%
I use online forums - 12.68%
I turn to my family - 10.55%
I take classes - 8.17%
I go to work conferences - 5.83%
None of the above - 3.32%

 
How confident do you feel in your abilities as a business owner?

 
Who do you lean on for personal support when your business is going through a rough patch? (percent answers)
My friends - 20.13%
My family or significant other - 33.03%
My faith community - 10.04%
My pet - 8.58%
My business mentor - 7.63%
Social media/online forums - 7.52%
I see a counselor or life coach - 4.66%
None of the above - 8.41%

*Methodology: TSheets commissioned Pollfish to survey 1,067 business owners, aged 18+, throughout the U.S. in April 2019. TSheets designed and paid for the survey and welcomes the re-use of this data under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original source is cited with attribution to “TSheets by QuickBooks.”