As financial services professionals, we must understand the broader landscape of socio-economic trends in our country. The recession and economic upheaval of the last few years has illuminated the significance of small business owners in the U.S. Their economic impact has manifested in the American economy in several ways. In the aggregate, small business owners:
- Employ about half of all private sector employees
- Pay 43% of total U.S. private payroll
- Have generated 65% of net new jobs over the past 17 years (1993-2009).
With statistics like these, one could argue that small businesses are the backbone of America’s economy, and we have a duty to ensure that they survive and thrive so that our economy can do the same.
A trend that should not be ignored is the growth of minority small businesses owners. The U.S. Census Bureau’s 2007 Survey of Business Owners indicates that “the number of minority owned businesses has increased at more than double the rate of all U.S. businesses between 2002 and 2007.” Because almost 23% of all businesses in the U.S. are either minority owned or equally minority/nonminority owned, the growth of these firms is equally important to our country and our national economy.
While many of us focus efforts on working with small business owners to help them protect their businesses and families, we often roll minority-owned businesses into the effort with little focus paid to the unique differences between these two broad markets. If we recognize the importance of minority owned to the business landscape, our country and our national economy, we should work to understand what the unique differences are among and between them.
Once understood, we need to work with multicultural small business owners — first by educating them and then by helping them put long-term plans into place — to ensure their businesses survive and thrive so that our economy can do the same.
Massachusetts Mutual Life Insurance Company (MassMutual) launched the study Business Owner Perspectives: 2011 Insights in an Uncertain Economy, one of the first of its kind to look at the attitudes, motivations and concerns of small business owners in the U.S., with a specific focus on multicultural business owners.
This is the latest effort by the company in both business and multicultural markets, bridging the two to come up with this unique study. In short, we find there are similarities among all small business owners as well as unique findings among each cultural group. This article focuses on one of the key findings in our research.
Motivations for starting a business
In our research, we interviewed ethnic and non-ethnic business owners. The multicultural groups surveyed are African-Americans, Asian-Indians, Chinese, Koreans, and Hispanics. We see several differences among general population business owners and multicultural business owners in respect to the reasons why they started their businesses.