DNA of an American Entrepreneur: Hiscox study reveals challenges and triumphs
Half of US small business owners are optimistic for new year with compelling
differences between male and female small business owners.
*More responding U.S. small business owners (50%) are optimistic about the
coming year than they were in 2011 (45%), however optimism is down from
*Over the last 12 months, male small business owners reported 5% more
growth in both revenues and new customers than their female counterparts,
with 50% of male small business owners reporting revenue growth and 57%
reported new customer growth.
*34% of male small business owners worked on average between 40 to 49 hours
per week, while female small business owners (also 34%) were most likely
to work an average of 29 hours or less per week.
*Women are using social media for a variety of business reasons, whereas
men use social media tools primarily for hiring and recruiting.
*Despite the mainstream popularity of crowd funding, over 90% of male and
female small business owners have not considered it as a funding option.
NEW YORK, Sept. 12, 2013 (GLOBE NEWSWIRE) -- Hiscox, a global specialist
insurer that provides U.S. small businesses with the simplest way to purchase
customized business insurance online or over the phone, announced today the
findings of the fifth annual DNA of an Entrepreneur report. The study includes
insights from 500 small and medium-sized businesses across the U.S. and
provides a unique and revealing portrait of the financial pressures, stresses,
opportunities and challenges faced by entrepreneurs. This year's findings
reveal that although male entrepreneurs were more likely to report growth in
revenue, new customers and number of employees, the gender gap is narrowing as
female entrepreneurs continue to generate strong results.
Ben Walter, CEO of Hiscox USA, commented: "Our fifth annual study of small
businesses reinforces trends that we have seen while working closely with
small business owners across the country. Despite challenges still lingering
from the financial crisis, American small business owners have maintained
their resolve and determination to launch and sustain successful enterprises.
In fact, the majority of business owners we spoke to in this study believe
that the continuing macroeconomic struggles have made them stronger and more
determined to succeed."
Optimism About the Coming Year
Half of all U.S. small business owners (50%) are optimistic about the coming
year. Overall optimism has increased by 5% since 2011, when 45% of all U.S.
small business owners reported having a positive outlook on the year ahead.
However, optimism is down from 2012, when 55% of all U.S. small business
owners reported being optimistic about the coming year.
Closing-In on the Gender Growth Gap
More male small business owners reported growth over the last 12 months than
their female counterparts, with 50% of male small business owners reporting
revenue growth (females: 45%), and 57% of males reporting new customer growth
(females: 52%). Additionally, over twice as many male small business owners
(32% vs. 15%) indicated that they plan to hire new staff in the year ahead.
However, the business growth gap that exists between genders appears to be
narrowing. As compared with 2011, when 43% of male small business owners
reported a revenue growth versus 34% of their female counterparts, the spread
between revenue growth among males and females has tightened by 4%.
Motivation: Flexibility vs. Autonomy
According to the study, over one-third of male small business owners (34%)
reported working on average between 40 to 49 hours per week, while female
small business owners were most likely (34%) to work on average 29 hours or
less per week. This difference is supported by the different drivers for men
and women for starting small businesses as shared by the study participants.
The majority of women (70%) cited "more flexibility over working hours" as the
main benefit to being in a small business as opposed to a larger business or
company. Alternatively, the majority of men (60%) cited "less bureaucracy" as
the primary benefit of being in a small business.
Managing New Frontiers: Social Media and Crowd Funding
Small business owners are continuing to implement and leverage social media
tools to communicate with customers and employees, connect with prospects, and
recruit talent. Women are more likely than men to use social media in nearly
all aspects of their business operations. In particular, women reported
utilizing social media tools for keeping in touch with customers (45%), as
well as for communications, marketing or public relations initiatives (41%).
Hiring/recruitment is the only area of operation where men are more likely to
use social media than their female counterparts (18% and 7%, respectively).
Despite mainstream popularity, small business owners have yet to embrace crowd
funding. An overwhelming majority of both male (92%) and female (94%) small
business owners said that they had not considered alternative sources of
funding, such as crowd sourcing.
Government Does Not Support Small Business
Nearly two-thirds of both men and women (62% and 63%, respectively) indicated
that the U.S. taxation system does not favor those seeking to set up their own
business. Both men and women also agreed (64% and 61%, respectively) that
government bureaucracy is a major barrier to setting up a small business in
the U.S. Interestingly, this sentiment has grown for women since 2011, up from
54%. Only 17% of male small business owners and 16% of female small business
owners have approached a member of the local, state or national government for
help on a small business issue. Forty-eight percent of all male small business
owners and 58% of all female small business owners spent less than one hour
per week dealing with government regulation.
Triumphs and Challenges
Ben Walter, CEO of Hiscox USA, along with author, speaker and small business
coach Melinda Emerson, better known as the SmallBiz Lady, led a panel
discussion this week in New York City to explore implications of the findings
from this year's study. The event also featured New York small business
owners, Brian Moran, Founder & CEO of Brian Moran & Associates, and Jennifer
Shin, Founder & Principal Consultant of 8 Path Solutions, who provided
personal insights on the challenges and opportunities associated with running
Key takeaways from the panel included:
*Healthcare reform has the potential to structurally change the landscape
for small businesses by easing the fear entrepreneurs have of losing
access to their health benefits when they are taking "the leap" to start a
*Disruptive technologies such as social media have fundamentally changed
the way in which small business owners operate and have levelled the
playing field with large companies, by allowing small business owners to
obtain information faster, reducing geographical limitations and providing
access to scale;
*This year's eDNA study highlights the differences and similarities among
male and female small business owners, but panelists agreed that fostering
diversity of all kinds in the workplace spurs innovation. In turn, small
business owners should be strategic in their hiring decisions in order to
create a dynamic workforce;
*According to the U.S. Labor Department, unemployment fell to 7.3% in
August. Despite continued concerns about nationwide unemployment levels,
there is a war for talent among small businesses that are challenged to
find, secure and retain qualified employees. According to panelists,
investing time and resources to train and professionally develop talent
will continue to be of critical importance.
"The single biggest challenge for small business owners is not finding
opportunities, but finding capacity," said Emerson. "Today's small business
owner is pulled in a hundred different directions trying to establish, run and
grow their business. Having a strong plan that balances both the long-term and
day-to-day goals is critical, and without this you will fail. Small business
owners should also always be on the lookout for ways to tap into the expertise
of their peers and thought leaders within the small business community, as
this is one of the most invaluable assets we have in our arsenal."
Hiscox specializes in insurance for small business owners, such as
professional liability (errors and omissions insurance) and commercial general
liability customized for a range of fields including IT, consulting,
marketing, photography, real estate, beauty and health. Hiscox offers business
insurance quotes direct and online in real-time along with other liability
insurance products, such as business owners policies. Since launching their
ground-breaking online service in the U.S. in 2010, Hiscox has received an
average customer service rating of 4.8 out of 5, and 96% of those surveyed
would recommend Hiscox.
Link to infographic:
Notes to editors
The eDNA report is a global annual study of 3,000 owners or partners in small
and medium-sized businesses in the United States, the United Kingdom, the
Netherlands, Germany, France and Spain, with 500 participants per country.
Access the full eDNA 2013 report, and read more news from Hiscox Small
Sample and methodology
Respondents were owners or partners of small businesses in the UK, USA,
Netherlands, Germany, France and Spain. The businesses were predominantly
service-based (79%). 92% were below $1.54 million in annual revenue, 61%
$154,000 or below. 41% were one-person businesses, and 73% had fewer than five
employees. 56% of respondents were men, 44% women. 54% of respondents were
aged 40-59, 35% under 40.
The research was conducted for Hiscox by The Survey Shop. The sample was drawn
from online panels. 3,000 owners/partners took part between 17th-26th July
2012. Statistical accuracy: +/- 1% to +/- 1.5% for the whole sample of 3,000
and +/-2% to +/-4% for each country's sample of 500.
About Hiscox Small Business Insurance
Hiscox, the international specialist insurer, is headquartered in Bermuda and
listed on the London Stock Exchange (LSE:HSX). Hiscox is the first company in
the U.S. to offer insurance for small professional services businesses direct,
online, and in real-time. We provide professional liability, general liability
and business owner's insurance, underwritten by Chicago-based Hiscox Insurance
Company Inc., which is rated 'A' (Excellent) by A.M. Best Company. Additional
information can be found on the Why Choose Hiscox? page. Coverages are subject
to underwriting and may not be available in all states.
Hiscox also provides professional liability, property and specialty insurance
to U.S. businesses through US-based brokers. This communication does not
constitute a solicitation of business by Hiscox's syndicates at Lloyd's,
CONTACT: Hunter Hoffmann
(203) 254-1300, ext 206
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