In spite of the current economic environment, most small business owners remain optimistic about their prospects for success in the short-term, according to a new study.
The Hartford Financial Services Group, Hartford, Conn., published this finding in a new survey of 2,000 small business owners with fewer than 100 employees and annual revenue of $100,000 or more who have been in business for at least one year. Examining the issues and factors impacting small businesses success and outlook, the Hartford Small Business Success Study was developed by The Hartford with Fahlgren Mortine and fielded via telephone and Web by Abt SRBI from July to September.
Fifty-one percent of the study’s respondents project that they will be very successful in the next two years. Only 6% are predicting they will fail to achieve success in that timeframe. Confidence in their ability to stay in business, the study says, is a major factor leading many small business owners to feel as though they are currently successful.
Despite high unemployment rates, finding qualified talent remains a challenge for 59% of small business owners. At the same time, two-thirds (68%) say that their business is a consideration when voting, particularly if certain policies directly impact their business.
The majority (70%) of small business owners feel successful, even as they face challenging conditions.
“We developed this comprehensive study of the nation’s small businesses to learn how well equipped they are to maximize their future success,” says The Hartford President and CEO Liam McGee. “Small businesses are the U.S. economy’s primary job creators, and a powerful force—not just economically but also behaviorally. From the study we learned that most of them expect to be successful in the next two years, even as they face challenging conditions. Our hope is that the U.S. will foster an environment that is more hospitable to small businesses.”
Eighty-two percent of the survey’s respondents say they place great importance on doing something they feel passionate about and enjoy. Although 77% acknowledge that increasing profitability of the business year over year is very important, only 18% say this is the most important factor in defining success.
The study also found that growth is not a shared goal among all small business owners. While 52% do consider themselves to be growth-oriented, 48% describe themselves as maintenance-oriented and are comfortable running their business at its current size.
The national economy, the study says, continues to put pressure on a majority of small business owners, with 57% indicating it has had an impact. When asked what keeps their business from being successful, small business owners note that financing their business is a particular area of pain. Specifically, 34% of respondents say that obtaining a loan or other capital is difficult.
The study’s respondents also identify economic constraints, such as government rules, regulations and taxes, as the single biggest factor holding them back (37%). And, they say that uncertainty about how public policy could potentially stunt the future growth of business is hindering their ability to plan ahead.
The study’s findings also validate a common oversight among small business owners: overlooking long-term planning goals while focusing on short-term business needs. Only 35% of small business owners say they have a formal, written business plan for the future.
Other notable findings of the survey include:
- Most small business owners want to stay deeply involved in the operation of their business (81%).
- Achieving a comfortable lifestyle for themselves (79%) and their employees (72%) is important.
- An overwhelming majority indicate they enjoy owning their business (90%).
More information on The Hartford Small Business Success Study can be found here.