A recent survey of small business owners conducted by Intuit found that small businesses owners have become increasing resourceful when launching their new businesses. A notable finding in the survey was that most United States small businesses start with $10,000 or less in capital, primarily funded from the entrepreneur’s individual savings. Key takeaways from the Intuit survey include:
- As many as 64 percent of small business owners launch their business with less than $10,000 in startup capital. Around 12 percent of those surveyed initially invested between $10,000 and $20,000, 11 percent invested between $20,000 and $50,000, and only 13 percent invested $50,000 or more. Additionally, 75 percent of small business owners surveyed relied on their own personal savings to start their businesses.
- Most business owners (68 percent of those surveyed) agree that the first year in business is the most difficult. In contrast, 19 percent reported the first year is the same as other years, 8 percent said it wasn’t as difficult as other years, and 4 percent said it was the easiest year. Interestingly, in looking for external guidance, 38 percent of first year business owners sought information via online searches, 23 percent through friends who own small businesses, 17 percent via formal education, and 12 percent from the Small Business Administration (SBA).
- The number one regret reported by 68 percent of small business owners is that they didn’t spend more time learning about financial management. When asked what they would do differently for their business launch if given the chance, 67 percent said they would write a better business plan, 65 percent reported they would invest more time and money in marketing, 49 percent would seek out a mentor, and 29 percent would hire an accountant.
- In order to feel confident about the long-term health of their business, 57 percent of small business owners require $50,000 or less in annual revenue (with 35 percent needing at least $30,000 and 22 percent needing between $30,000 and $50,000). Around 21 percent reported they needed between $50,000 and $100,000 in annual income to feel confident, while 22 percent need over $100,000.
According to Small Business Labs, their surveys of freelancers and independent contractors consistently show that most of those in this category spend even less, with an average of $5,000 used to get their businesses going.
King, Steve. “Most Small Businesses Are Started with Less Than $10,000.” Small Business Labs, Emergent Research. 10/14/14. (10/16/14.) http://www.smallbizlabs.com/2014/10/most-small-businesses-are-started-with-less-than-10000.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+SmallBizLabs+%28Small+Biz+Labs%29.
Sharpe, Stephen. “Did You Know? Most Small Businesses Start with $10,000 or Less.” Intuit. 8/24/14. (10/16/14.) http://quickbooks.intuit.com/r/trends-stats/know-small-businesses-start-10000-less/.