Owning a small business has never been for the faint of heart, and over the past decade radical shifts in government policy, the financial world, and technology (particularly how we communicate) have presented even more challenges — and opportunities — for entrepreneurs.
In an effort to gauge the greatest concerns of small-business owners today, Intuit compiled data from diverse sources into an infographic (see below). We also made a few other observations about what it takes to start and run your own operation in 2012.
Modern small-business owners…
…need less “stuff” to get started. Launching a business used to require a physical location, an infrastructure, and a team. Thanks to our increasingly connected society, these so-called “barriers to entry” have lessened considerably, allowing SBOs to create viable “virtual” businesses with far fewer monetary resources than bricks-and-mortar entities. As Josh Farkas of creative-services provider Cubicle Ninjas puts it, “The biggest investment in most startups today is not money, but effort. In a world where old friends are only a click away, a person can engage their entire social sphere in seconds. Bootstrapping and working from home allows entrepreneurs the freedom to be as big as they wish to be.”
…don’t leave business at the office. Thanks to developments in cloud computing and smartphone technology, SBOs can maintain real-time communications with clients and employees through videoconferencing, virtual desktops, email, and instant messaging at literally, any time — and from any place. Anthony Moore, founder of Paradigm Group Consultants, says despite having more flexibility thanks to technology, small-business owners “live the entire life cycle of the business,” from concept to billing — and everything in between. “I wake up knowing that we have to get the job done. Sometimes those wake up calls come at 3 a.m. (without an alarm).”
…are highly affected by government decisions. When the government changes regulatory policy, SBOs feel the impact on their infrastructure and bottom line. In fact, 75 percent of SBOs ranked the “effectiveness of U.S. leaders” as a primary concern in one study. Recent changes in health-care reform will likely strengthen that sentiment. The National Federation of Independent Businesses says that small businesses with more than 50 full-time employees will be highly impacted by the recent passing of the Patient Protection and Affordable Care Act, and that although small businesses can escape certain mandates by grandfathering existing health insurance policies, 80 percent could lose that status by 2013. Further, the NFIB says that SBOs must devote “considerable human resources, legal, and accounting resources to monitoring and navigating regulatory change.”
…have money on their minds. The NFIB’s Index of Small-Business Optimism declined three points in June, reaching a low not seen since October 2011. Nearly one-quarter of SBOs surveyed cited weak sales as their most important business problem (23 percent), followed by taxes (21 percent). But, they remain hopeful that brighter days are in the future: 42 percent of SBOs surveyed by Intuit think their local economies are on the upswing, and the majority expect to do better this year than in 2011.
…are not a boys club. According to the National Women’s Business Council, the number of women-owned companies increased 44 percent between 1997 and 2007, a rate of growth twice as fast as male-owned firms. Of the 7.8 million women-owned enterprises in the U.S., 88 percent are small businesses.
Click below for the full infographic!