Much is written about small business owners and their marketing investments. But not much is said about their fears and motivations when starting out.
That gap has been filled, at least in part, by Small Business Survey 2020, a study by BizFilings, a firm that provides legal and incorporation services.
Of the small-time owners surveyed, 39% say they were afraid of failure when they started. Another 31% feared they might do something wrong, and 25% admit they had no one to advise them.
In addition, 23% say it’s difficult to stay on top of laws and regulations, and 23% don’t understand the tax implications.
Yet 82% of current operators say owning a business is more rewarding than working for someone else. In contrast, 76% of the future owners say the same.
Few people are motivated solely by market needs. Here are the reasons for starting a business:
Current and future owners look at things differently.
Future owners have a more rosy view of maintaining the proper work-life balance: 47% see it as a challenge, versus 55% of those who have already been there.
But 56% of future owners see the cost of health care as one of their biggest hurdles, compared with 44% of current owners.
There are also differences in their expected channel usage.
Among current owners, 28% are exclusively online, while 32% operate only in brick-and-mortar and 40% are active in both.
That means 68% are online and could be actively conducting email marketing. At the least, they need triggered programs for recovering abandoned carts and schemes for driving registrations.
Looking forward, 57% of future owners expect to operate in both channels, which also opens up opportunities for multichannel marketing.
Of course, the style of marketing depends on the vertical.
Out of the current owners surveyed, 12% are in the construction/contractor field and 11% are in retail. Food service, IT and arts/entertainment make up 6% apiece, and business consulting comes in at 5%.
Of future SMB owners, 14% are in arts/entertainment, 11% in retail, 11% in food service/restaurant and 8% in health care.
Legal and government requirements are another big challenge. Here’s how they find the information they need to keep up:
In another finding, the study reports that 26% of current owners and 38% of future owners use or plan to use remote workers. A whopping 56% of the current people say they will not, and 18% aren’t sure.
And if they do use them, almost all want in the same state as the business.
Here are a few other pertinent stats:
BizFilings surveyed owners of 600 current and future small businesses.