SAN FRANCISCO, Sept. 15, 2014 /PRNewswire/ -- Starting and sustaining a small business is no small feat, but according to a new study, more than nine in 10 (92 percent) small business owners[i] say they have no regrets, and nearly just as many (88 percent) would do it all over again if given the chance. Commissioned by Bank of the West and conducted online by Harris Poll in May 2014, the "Pay It Forward" survey uncovered the good, the bad and the ugly of small business ownership – including best practices, lessons learned, pitfalls to avoid and inspiring advice – from more than 500 owners in operation for five years or more.
The "Pay It Forward" survey revealed that majorities of small business owners experience benefits associated with running their own business:
It has improved their financial well-being (73 percent)
It doesn't feel like a job (55 percent)
It provides financial peace of mind (52 percent)
They prefer "being their own boss" (41 percent)
Given the tremendous obstacles in starting a business and the low success rate of small business ventures surviving the first 18 months,[ii] small business owners offered the following when asked for their best business advice for new or aspiring entrepreneurs:
Nearly one in three (31 percent) said to separate business finances from personal finances
Twenty seven percent advised to maintain a healthy cash reserve
More than a fifth (22 percent) said manage cash flow
Seventeen percent counseled to create a budget and stick with it
In looking back at any "If only I could, I would" moments, small business owners admitted they:
Didn't do enough marketing and promotion (32 percent)
Hired a friend or family member who was less costly, rather than the right person for the job (24 percent)
Didn't have the right tax and/or legal support (19 percent)
Didn't invest in enough technology (15 percent)
As for their "secret sauce," when asked what positions small businesses for success against competitors large and small, more than three fourths (77 percent) of small business owners said service is their overall key differentiator, followed by expertise (56 percent) and price (51 percent).
"'Paying it forward' has become synonymous with moving together toward a better future, and in conducting our research, I'm thankful that small business owners have been so generous with their time and insights in an effort to help smooth the way for aspiring entrepreneurs," said Michelle DiGangi, executive vice president of small and medium enterprise banking at Bank of the West. "I liken it to creating a community of virtual mentors who we can all be inspired by and learn from, and I look forward to developing this community over time."
Jumping in to Ownership at an Early Age and the Pitfalls of Being Unprepared "Pay It Forward" found that almost three in four (74 percent) small business owners started their first business by 39 years old on average. Using their own initiative, 85 percent started their business themselves or with others, with very few buying it (12 percent) or inheriting it (2 percent). Nearly half (47 percent) said they "jumped right in" to start their own business and most (79 percent) agreed that they have been caught off guard or have been unprepared to deal with certain hardships at least once in their ownership, including situations related to slow times (40 percent), taxes (36 percent) and health care benefits (32 percent).
Owners' Advice: Don't Go At It Alone Perhaps tied to their own lack of preparation, about three in four (76%) small business owners said that at some point, their business would have benefited from subject matter advice and consultation. Looking back, about one in three small business owners wish they had consulted an expert when they were putting together their marketing plan (37 percent) or when their finances were tight (33 percent). As advice for those just starting their own business, they cited the following subject matter experts as being most important: CPA or attorney (49 percent); financial advisor (39 percent) and business strategist (38 percent). In addition, they said that throughout their ownership they consider the advice of the following to be extremely or very important:
Accountants (72 percent)
Financial advisors (54 percent)
Personal network of friends and family (51 percent)
Attorneys (50 percent)
"Small business owners clearly take a 'no regrets approach' to the way they run their respective companies," DiGangi continued. "Through our close relationships with business owners, we've seen firsthand how important a 'take the plunge, don't hesitate' attitude can be toward starting a business. Yet, as also evidenced by our research, we're also reminded that it's just as important for small business owners to create a plan, consult a financial expert and make sound hiring and marketing decisions to maximize the level of success they can achieve."
A copy of the survey's full findings and analysis is available upon request. Select participants of the survey also are available for media interviews. For more information on small business ownership, visit the Bank of the West blog's dedicated small business page at http://blog.bankofthewest.com/category/your-business/. The "Pay It Forward" survey is the third installment in Bank of the West's "How Small Business Works" series, a periodic look at the trends and forces that impact small businesses.
Methodology This survey was conducted online within the United States by Harris Poll on behalf of Bank of the West between May 6 and 19, 2014, among 504 US residents who own a business with two or more non-owner full-time employees and less than $10 million in annual revenue, and which has been in operation for at least five years; additionally, these respondents have had an ownership role for at least five years. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables, please contact Debra Jack using the included contact information.
About Bank of the West: Bank of the West is a regional financial services company chartered in California and headquartered in San Francisco with $69 billion in assets. Founded in 1874, Bank of the West provides a wide range of personal, commercial, wealth management and international banking services through more than 650 offices in 21 states and the internet (bankofthewest.com). Bank of the West is a subsidiary of BNP Paribas, which has a presence in 80 countries with 190,000 employees.
About Nielsen & The Harris Poll On February 3, 2014, Nielsen acquired Harris Interactive and The Harris Poll. Nielsen Holdings N.V. is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence and mobile measurement. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA and Diemen, the Netherlands. For more information, visit www.nielsen.com.
[i] In this survey, small business owners are defined as US residents who own a business with two or more non-owner full-time employees and less than $10 million in annual revenue, which has been in operation for at least five years; additionally, these business owners have had an ownership role for at least five years.