Small Business Optimism Grows Around the World: Results from DNA of an Entrepreneur StudyJennifer Peaslee
Results are in for the 7th annual DNA of an Entrepreneur study, a global research project conducted by Hiscox that gives us a glimpse at small businesses around the world. This year’s study found a sharp increase in optimism as well as upward trends for sales and innovation. Here’s a look at the major findings and how American small businesses compare to the rest of the world.
The study included interviews with small business owners from the US, the UK, France, Germany, the Netherlands and Spain. Over 4,000 people were interviewed. This is the seventh survey in this series, conducted by Hiscox, an international provider of specialist insurance for small business.
Portrait of a Small Business Owner
Over half of the respondents say they consider themselves to be an entrepreneur, and nearly half said they always thought they’d start their own business. When ranking countries in perceived entrepreneurial spirit, French, UK, US, German, and Spanish respondents all rank the US as number one.
As a whole, small business owners around the world put in an average of 42 hours per week, and American small business owners don’t take much time off either. US respondents reported an average of 10 holiday days per year, whereas all the other countries surveyed took 20-26 holiday days. A shocking one-in-five US small business owners do not take any holiday days!
That said, being a small business owner has its perks. Benefits were ranked by respondents and included:
- More flexibility over working hours (66%)
- Greater feeling of being in control of their life (58%)
- Ability to work from home/other locations (57%)
What Makes an Entrepreneur?
Small business owners around the world were also asked to weigh in on the perceived attributes of an entrepreneur. Hard work and determination were the top rated characteristics, along with creative thinking, independence, ability to make relationships, intelligence, experience, patience and courage. Ability to manage others and ability to delegate were the lowest ranked characteristics at 27 percent and 21 percent respectively.
The Hiscox study has been conducted for seven years, allowing us to look at changes over time. It is here where we see optimism shining through at a three-year high. In 2013 only 52 percent said they were optimistic about the year ahead. In 2014 this grew to 57 percent, and the 2015 study found that 62 percent of all respondents are optimistic for next year. When looking across countries, US small business owners indicate the highest level of optimism – 69 percent are hopeful for what 2016 has in store.
These optimism numbers are backed by many other statistics in the survey that point to small business growth:
- 71 percent of small businesses reported growth in new customers in the past year (compared to 59% last year).
- 65 percent have seen growth in revenue in the past year, with 10 percent of those seeing revenue growth of 20 percent or more.
- 45 percent have launched a new product in the past year and 51 percent plan to launch a new product next year
Barriers to Growth
Despite the growing optimism among small business owners, there are still barriers to growth. In general, small business owners say that governments aren’t doing enough to help them, with 67 percent agreeing that “government bureaucracy is a major barrier to setting up your own business.” Sixty-four percent also say that the taxation system doesn’t favor small business and the education system doesn’t encourage individual ideas and dreams. Respondents say that governments could help by reducing direct taxation (83%), making simpler accounting rules (74%), and stimulating bank loans for small businesses (71%).
While the study looked at small business owners as a whole to study global trends, it also broke down results by country and it is here where we see American small business thriving. US respondents topped the survey for growth in revenue, profits and customers in the past year. In addition, 41 percent of US entrepreneurs say they were influenced to start their business by a role model, compared to a 31 percent global average. This is why resources such as Smart Hustle are so important in influencing the next generation of entrepreneurs.