DNA of an American Entrepreneur

Written by chicceo Published in

A recent study by Hiscox reveals some interesting data...

DNA of an American Entrepreneur: Hiscox study reveals challenges and triumphs
 
Half of US small business owners are optimistic for new year with compelling differences between male and female small business owners.

 • More responding U.S. small business owners (50%) are optimistic about the coming year than they were in 2011 (45%), however optimism is down from 2012 (55%).
 • Over the last 12 months, male small business owners reported 5% more growth in both revenues and new customers than their female counterparts, with 50% of male small business owners reporting revenue growth and 57% reported new customer growth.
 • 34% of male small business owners worked on average between 40 to 49 hours per week, while female small business owners (also 34%) were most likely to work an average of 29 hours or less per week.
 • Women are using social media for a variety of business reasons, whereas men use social media tools primarily for hiring and recruiting. While the popularity of social media has made it a valuable recruiting tool, as those who have an MA in Industrial and Organizational Psychology have noted, you must be careful when using it in this manner. When hiring, some candidates might be turned off if they discover that you have screened them through social media, as it feels like an invasion of privacy. At the same time, conducting this screening could reduce your risk, since you will have an idea of each candidate’s lifestyle before making a hire.
 • Despite the mainstream popularity of crowd funding, over 90% of male and female small business owners have not considered it as a funding option.

New York, September 12, 2013 – Hiscox, a global specialist insurer that provides U.S. small businesses with the simplest way to purchase customized business insurance online or over the phone, announced today the findings of the fifth annual DNA of an Entrepreneur report. The study includes insights from 500 small and medium-sized businesses across the U.S. and provides a unique and revealing portrait of the financial pressures, stresses, opportunities and challenges faced by entrepreneurs. This year's findings reveal that although male entrepreneurs were more likely to report growth in revenue, new customers and number of employees, the gender gap is narrowing as female entrepreneurs continue to generate strong results.
 
Ben Walter, CEO of Hiscox USA, commented: "Our fifth annual study of small businesses reinforces trends that we have seen while working closely with small business owners across the country. Despite challenges still lingering from the financial crisis, American small business owners have maintained their resolve and determination to launch and sustain successful enterprises. In fact, the majority of business owners we spoke to in this study believe that the continuing macroeconomic struggles have made them stronger and more determined to succeed."
 
Optimism About the Coming Year
 
Half of all U.S. small business owners (50%) are optimistic about the coming year. Overall optimism has increased by 5% since 2011, when 45% of all U.S. small business owners reported having a positive outlook on the year ahead. However, optimism is down from 2012, when 55% of all U.S. small business owners reported being optimistic about the coming year.
 
Closing-In on the Growth Gap
 
More male small business owners reported growth over the last 12 months than their female counterparts, with 50% of male small business owners reporting revenue growth (females: 45%), and 57% of males reporting new customer growth (females: 52%). Additionally, over twice as many male small business owners (32% vs. 15%) indicated that they plan to hire new staff in the year ahead. However, the business growth gap that exists between genders appears to be narrowing. As compared with 2011, when 43% of male small business owners reported a revenue growth versus 34% of their female counterparts, the spread between revenue growth among males and females has tightened by 4%.
 
Motivation: Flexibility vs. Autonomy
 
According to the study, over one-third of male small business owners (34%) reported working on average between 40 to 49 hours per week, while female small business owners were most likely (34%) to work on average 29 hours or less per week. This difference is supported by the different drivers for men and women for starting small businesses as shared by the study participants. The majority of women (70%) cited "more flexibility over working hours" as the main benefit to being in a small business as opposed to a larger business or company. Alternatively, the majority of men (60%) cited "less bureaucracy" as the primary benefit of being in a small business.
 
Managing New Frontiers
 
Small business owners are continuing to implement and leverage social media tools to communicate with customers and employees, connect with prospects, and recruit talent. Women are more likely than men to use social media in nearly all aspects of their business operations. In particular, women reported utilizing social media tools for keeping in touch with customers (45%), as well as for communications, marketing or public relations initiatives (41%). Hiring/recruitment is the only area of operation where men are more likely to use social media than their female counterparts (18% and 7%, respectively).
 
Despite mainstream popularity, small business owners have yet to embrace crowd funding. An overwhelming majority of both male (92%) and female (94%) small business owners said that they had not considered alternative sources of funding, such as crowd sourcing.
 
Government Does Not Support Small Business
 
Nearly two-thirds of both men and women (62% and 63%, respectively) indicated that the U.S. taxation system does not favor those seeking to set up their own business. Both men and women also agreed (64% and 61%, respectively) that government bureaucracy is a major barrier to setting up a small business in the U.S. Interestingly, this sentiment has grown for women since 2011, up from 54%. Only 17% of male small business owners and 16% of female small business owners have approached a member of the local, state or national government for help on a small business issue. Forty-eight percent of all male small business owners and 58% of all female small business owners spent less than one hour per week dealing with government regulation.
 
Triumphs and Challenges
 
Ben Walter, CEO of Hiscox USA, along with author, speaker and small business coach Melinda Emerson, better known as the SmallBiz Lady, led a panel discussion this week in New York City to explore implications of the findings from this year's study. The event also featured New York small business owners, Brian Moran, Founder & CEO of Brian Moran & Associates, and Jennifer Shin, Founder & Principal Consultant of 8 Path Solutions, who provided personal insights on the challenges and opportunities associated with running their businesses.
 
"The single biggest challenge for small business owners is not finding opportunities, but finding capacity," said Emerson. "Today's small business owner is pulled in a hundred different directions trying to establish, run and grow their business. Having a strong plan that balances both the long-term and day-to-day goals is critical, and without this you will fail. Small business owners should also always be on the lookout for ways to tap into the expertise of their peers and thought leaders within the small business community, as this is one of the most invaluable assets we have in our arsenal."
 
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