Small businesses make up 99.7% of all employers and nearly half of the private US labor force according to the Small Business Administration. So what’s the mindset of these owners of businesses with 500 or less employees? EMyth, a business coaching organization, surveyed over 1,700 owners of companies with average annual revenue of $4.7 million to find out.
Overall, they’re feeling pretty good. Three main points highlighted in the "State of the Business Owner 2013" report are outlined below:
In general, the owners felt positive about general economic conditions. More than six in 10 thought the economy would get better. They believed revenue would increase in 2013 from 2012, spiking the Optimism Index 25 points. Forty percent see more revenue growth than staff growth, and 60% said they were more profitable in 2012 than they were in 2011.
Owners are focused on growth, believing that this will provide them with more freedom. According to the survey results, the key factor driving growth is control. Of those surveyed, owners that used marketing metrics reported 10.6% more control and 7.6% more happiness. Those with role descriptions increased control by 11.2% and happiness by 9%. Business owners with written values showed control growth of 10.8% and an increase in happiness of 14.8%.
While owners are concerned about revenue growth, they are focused even more on increasing profits. The survey outlined The Essential Toolkit for Profitability, made up of nine best practices. The report showed that businesses that had written values, vision, and marketing plans, role descriptions, ideal customer profiles, sales and revenue plans, and business and marketing metrics had almost 60% better odds of meeting profit targets. Companies that employed only one of those practices had only a 6.6% chance and those that employed four practices had a 26.4% shot at meeting profitability targets.
Interestingly, 85% of those surveyed said they had written values but believed only 44% of their employees actually referred to them in their daily decision-making.
Finally, the report showed that money wasn’t the prime motivator behind owners starting their business. In fact, monetary reasons were fourth on the list. The top three reasons these entrepreneurs went out on their own were freedom to seek new opportunities, personal passion and independence from others’ control.
The full results of the survey can be viewed at https://www.stateoftheowner.com/.