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More Women Are Starting A Microbusiness

[ 1 ] Apr. 9, 2014 | SBO Editor

microbusiness

More women entrepreneurs are launching a microbusiness.

  • Nearly half of new these ventures are women-owned
  • Many microbusiness owners are pulling double duty, depending on a second job to make ends meet
  • Despite struggles, 69 percent of microbusiness owners say they have the ideal job
  • Microbusinesses would rather spend more time serving customers than taking time off

One in three of the micro business owners (31%) depend more on a second job for their personal income than they do on their business, yet 69 percent say owning their business is the ideal job, according to the new Sam’s Club/Gallup Microbusiness Tracker.

In collaboration with Gallup, Sam’s Club unveiled a new quarterly tracking poll today focused on America’s smallest businesses – microbusinesses — with five or fewer workers. With more than 25 million microbusinesses in the United States*, they account for approximately 10 percent of all American jobs across a broad spectrum of businesses, such as pizza shops and cafes, convenience stores, pet groomers, mechanics, offices, day care centers and more.

The results of the inaugural study provides new insights into the preparedness, concerns and needs of America’s vital microbusiness segment. The results reflect 868 phone interviews made in March 2014 with companies of five or fewer employees.

The first tracker reveals several important findings:

Women Microbusiness Entrepreneurs

  1. Women-owned microbusinesses are on the rise in the past two decades – Nearly half (45.7%) of newer microbusinesses are started or owned by women, while only 28.3 percent of microbusinesses 20 years or older are women-owned.
  2. Women (25%) are less likely than men (34%) to use bank loans to finance their business.
  3. Compared to their male counterparts, women are more likely to worry about working too hard and overdoing it (43.5% vs. 35.7%) and to agree that they struggle to balance work and life (36.3% vs. 32.0%).

Financing

  1. Over 60 percent of microbusiness owners have financed their business from personal savings, and nearly as many (55%) say having access to cash reserves is a major issue facing their business.
  2. Over two-thirds of microbusiness owners are choosing not to re-invest their tax refunds into their business, preferring to use the tax refund toward loan repayment or personal use.
  3. Despite working two jobs and investing their own money, 69 percent of microbusiness owners say they have the ideal job.
  4. Almost a third (30%) of older microbusinesses, those more than three years old, are experiencing flat revenue growth and are more likely to be letting employees go compared to newer microbusinesses.

Top Concerns

  1. While the day-to-day management of their business dominates much of their time, microbusiness owners want to spend more time serving customers (34%) than taking personal time off (25%) or planning for the company’s future (21%).
  2. Rising taxes and fees on goods and services (68%) is the number one concern for microbusiness owners. The cost of utilities (39%), inventory or raw materials (35%) and transportation (34%) are other issues weighing heavily on the minds of microbusinesses.
  3. Approximately one third (34%) of microbusinesses with employees say that providing adequate employee benefits is a major issue for them; meanwhile, four in 10 microbusiness owners (41%) said they are concerned about employee healthcare costs going up significantly in the coming year.

“Sam’s Club has served microbusiness members for more than 30 years,” said Rosalind Brewer, President and CEO of Sam’s Club. “We’re always conducting research with members to understand their needs and concerns, but with the Microbusiness Tracker, we want to give a broader, national voice to microbusiness. We believe these vital community businesses and the challenges of these entrepreneurs aren’t always represented in the small business discourse.”

“Microbusinesses are a unique segment within American small businesses – which the federal government defines as companies with up to 500 employees. Microbusinesses are the smallest of the small. It’s important that not only owners themselves, but policy makers, understand the different challenges microbusinesses are facing,” said Sangeeta Badal PhD, Gallup’s lead researcher for entrepreneurship and job creation.

“Microbusiness owners are constantly juggling multiple tasks, from managing the day-to-day running of the business to generating leads and finding customers. This leads to uneven sales. Very few have enough cash to pay their bills let alone save for future growth. These business owners operate on little-to-no margin of error and need support. The unique data of the Sam’s Club/Gallup Microbusiness Tracker not only aids policy and decision-making at the national level, but also provides real actionable insight for microbusiness owners,” added Badal.

For further information please review the article Three in Ten Microbusiness Owners Depend on Second Job for Most of Their Income and the Frequently Asked Questions document.

About The Sam’s Club/Gallup Tracker

The Sam’s Club/Gallup Microbusiness Tracker is a nationally representative survey that regularly reports on U.S. businesses with fewer than 5 employees, a key driver of Main Street economic growth. The tracker provides valuable insight into the mood and mind of microbusiness owners for decision makers and influencers in government and commerce by highlighting the unique concerns and challenges of microbusinesses along their path from startup to maturity. To learn more about the Sam’s Club/Gallup Microbusiness Tracker, visit SamsClub.com/Newsroom or Gallup.com.

 

 

 

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Category: Features

  • http://sblc.biz Steve Chapman

    I think most of us would prefer to be called Micro-enterprise owners. Microbusiness has a demeaning connotation as being small and insignificant. In actuality, according to the US Census, Micro-enterprises (1-9 people operations) constitute 95% of all businesses in operation across this country – that’s 26.6 million of us . But, thanks for shedding some light on the growth of women owned businesses with your article.