Small business owners say an improving economy and rapid innovation make now the “best time ever” to own a businessIntangible benefits of owning a business outweigh money
NORTHBROOK, Ill., Feb. 23, 2016 /PRNewswire/ — In a first-of-its-kind study of America’s small business sector released today, the Allstate/USA TODAY Small Business Barometer revealed a strong climate for small businesses in the country overall and a groundswell of optimism among local entrepreneurs with a majority (53 percent) saying rapid innovation and an improving economy make now the best time ever to own a small business.
The new Allstate/USA TODAY Small Business Barometer reveals an overall strong score for the country’s small business climate, with a groundswell of optimism among small business owners.
The new Allstate/USA TODAY Small Business Barometer combines a survey of more than 2,600 small business owners1 with a comprehensive catalog of public data to measure the strength of America’s small business climate nationally and in 25 major metropolitan areas across the country.
Deeper Insight into business challenges
“As a national network of small businesses, we wanted deeper insight into the challenges and opportunities facing local businesses across the country,” said Allstate Agency Owner Octavio Pina. “It’s encouraging to see small business owners report a deep and growing optimism about their prospects, particularly women- and minority-owned businesses. Local entrepreneurs are making sacrifices, overcoming hurdles, investing in their businesses and embracing leadership roles in their communities to pursue their dreams and help Main Street thrive across America.”
“USA TODAY is part of the broader USA TODAY NETWORK whose purpose is to provide reliable insight into important issues at both the local and national level,” said USA TODAY Editor in Chief Dave Callaway. “Partnering with Allstate to provide a deeper understanding of the small business climate is a great opportunity to educate our local communities on a topic vital to their growth.”
The Allstate/USA TODAY Small Business Barometer produced an overall score of 61 for the country’s small business sector, which rates as “strong” on the Barometer’s 0-100 scale. That ranking was reflected in the majority of cities across the country, with scores in 25 major markets ranging from 57 in New York to 64 in Indianapolis and Orlando.
The Barometer analyzed an extensive inventory of public data, including statistics from the U.S. Census Bureau, the Bureau of Labor Statistics, the Federal Reserve, the Federal Register and more. The questions posed to small business owners in the survey evaluated their outlook in eight different categories2: capital3, commodities4, customers5, innovation, labor6, regulation, technology and optimism.
The Barometer’s proprietary data model weighted the scores of each of the eight indicators to determine a final ranking based on the following ranges: “excellent” (81-100), “strong” (61-80), “solid” (41-60), “fair” (21-40) and “challenged” (0-20).
With a national score of 79, optimism received the highest total of any of the eight indicators. In particular, the Barometer revealed optimism to be extremely high among black business owners (100), Hispanic business owners (87), other minority business owners (92) and women business owners (85).
To get a more in-depth breakdown of the national profile, or to see how each city scored, visit www.allstate.com/Barometer.
Small business owners are optimistic and confident: More than half say there has never been a better time to own a small business.
- Nearly nine-in-10 (89 percent) of respondents believe the benefits of owning a small business outweigh the challenges.
- The Small Business Barometer ranks optimism to be especially high among women (85) and minorities (92).
Small business owners are innovators: They often try new things – adapting to change, working more, and paying themselves less.
- Just over half (52 percent) of small business owners have tried a new business practice in the past three months.
- The Allstate/USA TODAY Small Business Barometer ranks innovation strong (73) among small business owners across the country.
- Nearly four in 10 (38 percent) tried new technologies, but reported that financial barriers – higher costs, taxes and regulations – did get in the way.
Small business owners report positive performance: Nearly 80 percent reported that in the past year their business has grown the same or more compared to the previous year – an indication the economy continues to improve.
- More than six-in-10 (61 percent) of those surveyed said their business is doing “well” or “very well” these days.
- Nearly a third (31 percent) of small business owners in the Barometer survey plan to hire workers within the next three months — a potential boon to local economies.
Local entrepreneurs value intangible benefits more than money.
- Small business owners say there are a lot of things they value, including: “Being my own boss,” “Having a sense of freedom, “Following my passion,” and “Creating something on my own.”
- While nearly half of small business owners claim that being their own boss gives them tremendous enjoyment (49 percent), just one-in-five point to money as one of their key motivators. More than one-third cite flexible work hours (35 percent) and nearly a quarter get satisfaction from creating something all their own (22 percent) or following their passion (22 percent).
- Intangible sacrifices, however, are often necessary to make a small business work: Forty percent have frequently missed out on opportunities to spend time with family or friends.
Small business owners still face unique and significant challenges.
- More than half (54 percent) of small business owners ranked getting new clients as a five, six or seven on a scale of one (not challenging at all) to seven (very challenging) in terms of difficulty, and 36 percent say it is one of their two biggest problems – the highest response among all challenges.
- Four-in-10 (41 percent) have forgone salary to benefit their business, and prices for materials and equipment are going up: Nearly one-quarter (23 percent) of respondents reported they raised their own prices in the last year, while only 5 percent said they lowered their prices in that time frame.
- Forty percent of small business owners described the regulatory climate as “burdensome,” and 20 percent said it is “extremely burdensome.”
The Allstate USA Today Small Business Barometer
The Allstate/USA Today Small Business Barometer provides information about the small business climate in the United States and 25 of its largest markets. Built from a unique, proprietary data model, the Barometer combines the findings from a custom in-depth survey of 2,640 small business owners with public data to provide an experiential tool with insight into fundamental small business indicators and sentiment. For a full explanation of the methodology used in this study, please visit www.allstate.com/Barometer.