Small businesses play a significant role in the American economy, generating the
majority of new jobs
over the past decade. And, according to a new BW survey, despite facing challenges, most small-business owners find entrepreneurship rewarding.
The survey of over 2,000 U.S. adults — among whom 425 currently own a small business — commissioned by BW and conducted online in October 2024 by The Harris Poll, asked current and former small-business owners a variety of questions about why they started their businesses, the challenges they’re facing and how they view their businesses’ futures.
“Small businesses often act as a pillar to local economies and are pivotal to job creation and economic growth,” says Elizabeth Ayoola, a personal finance expert at BW. “Since small businesses represent
more than 40%
of America’s GDP, it’s critical to understand their pain points, strengths and how they can be better supported.”
A record number
of small businesses formed during the COVID-19 pandemic and, according to recent data,
they’re sticking around
. Our new survey shows that, while many small-business owners report facing economic headwinds, they’re finding the job of business owner to be a rewarding one.
Key findings
-
Small-business ownership is common, and many small businesses are new:
Almost one in five Americans (19%) currently own a small business; among them, more than a quarter (26%) started their business within the past 12 months. -
Finding and retaining customers is a prevalent issue for small businesses:
More than nine in 10 small-business owners (93%) say they’re facing challenges right now, with the most commonly cited challenge being finding or retaining customers (54%). -
But most small-business owners find owning their business rewarding:
More than four in five small-business owners (82%) say owning a small business gives them the work-life balance they want and 72% say they would open another small business in the future.
Small-business ownership is common, and many small businesses are new
According to our survey, 42% of Americans currently or previously owned a small business and almost one in five Americans (19%) currently own one.
Among current small-business owners, more than a quarter (26%) started their business within the past 12 months.
Small-business owners give a range of responses when asked why they started their business. The most common reason: Half (50%) say they wanted to increase their income.
About one in five small-business owners (19%) say the COVID-19 pandemic motivated them to start their business.
That finding tracks with statistics on business formations over the past several years.
“While COVID ushered in a challenging time for many Americans, it propelled some toward innovation and entrepreneurship,” says Ayoola. “Post pandemic, we’ve continued to see steady growth in business applications, which could signal that more Americans are embracing entrepreneurship as an alternative way of working and see business ownership as worth the accompanying risks.”
Perhaps reflecting the flexibility that ownership provides, the amount of time owners reported spending at their small business varied widely.
The typical small-business owner reports working 30 hours per week at their business. But more than a third (35%) report working less than 20 hours per week and roughly one in five (19%) say they spend 50 hours or more at their small business.
Notably, we allowed respondents to define for themselves the term “small business,” and sought to capture the sentiment of folks who earn money outside of traditional employment through a variety of entrepreneurial methods. For example, 52% of small-business owners in our survey say they sell goods, 50% sell services, 25% say they are an influencer (e.g., selling ads and gaining sponsorships online) and 10% would describe their business in “other” terms (small-business owners could choose more than one response).
Small-business tips: Getting started
-
Decide on an idea:
What skills or talents do you possess? And could they translate into a successful business? You’ll want to do some preliminary market research by, for example, scoping out potential competitors and figuring out whether there’s demand for the products or services you intend to offer. -
Write a business plan:
Your business plan should include an executive summary, market analysis and a financial plan. -
Choose a business entity type:
Your business entity type will determine, among other things, how you’re taxed and which licenses (if any) you’ll need.
Consider seeking advice from a legal professional to fully grasp the potential tax consequences that may arise.
Numerous small-business proprietors encounter difficulties in attracting and retaining clients, despite the ongoing trend of establishing new small businesses. Over 90% of small-business owners acknowledge facing challenges, with the primary obstacle being the acquisition and retention of customers, as reported by more than half of current small-business owners. Despite these obstacles, business owners display resilience by implementing various strategies to address the challenges.
A significant majority of small-business owners have taken action in response to recent economic conditions, with common measures including price adjustments, product/service expansion or reduction, hiring or laying off staff, changing physical locations, or closing storefronts.
Enhancing revenue is vital for any business’s success, as it ensures a continuous flow of income and strengthens the business’s financial position when seeking financial support. To increase revenue, small-business owners can focus on expanding their network, diversifying products/services, and identifying operational efficiencies to drive growth.
Although owning a small business presents challenges, a large majority of owners express satisfaction with their decision to pursue entrepreneurship. Many believe that owning a business offers financial stability, personal fulfillment, and a better work-life balance. A substantial proportion of small-business owners state that opening their business was a wise financial move, with many earning more than they would in traditional employment and on track to save for retirement.
This information was gathered through an online survey conducted in the United States by The Harris Poll on behalf of BW. The survey involved 2,090 U.S. adults, including 425 current small-business owners, with a sampling precision of +/- 2.5 percentage points. For more details on the survey methodology, please contact [email protected]
Disclaimer: BW does not guarantee the accuracy or reliability of the information provided in this article. Readers are advised to use this information at their own discretion and risk. The content should not be construed as a prediction of BW’s future performance or that of its affiliates. Forward-looking statements may contain risks and uncertainties, as indicated by certain expressions used in the article. document to make it more concise and direct.
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