Guest column by Dean Swanson
Where do we live the entrepreneur with the best current performance? In SCORE’s latest publication “The Megaphone of Main Street” of business research, he identified three groups of entrepreneurs who consistently outperform the others as drivers of the small business economy. They start businesses at higher prices and operate smaller businesses than others, although they are overlooked and often climb steeper hills to achieve their goals.
These different unsung entrepreneurs are first-generation or immigrant entrepreneurs, veteran entrepreneurs, and still entrepreneurs (those 55 and older). Over the past 25 years, these three groups have contributed to global entrepreneurship at much higher rates than the general population, despite their significant and unique challenges. Their contributions as new business creators have steadily increased. In this installment of SCORE’s “Main Street Megaphone,” they paid special attention to them as unknown entrepreneurs who have become critical representatives of the current landscape of American small businesses.
Although only 13.2% of the American population is a first-generation immigrant, it represents 20.6% of all American entrepreneurs. At a lower, but still notable, veteran business owners play a more important role in the business community, accounting for 9.1% of all business owners, compared to their smaller population (7, 6%) in the United States. the American population is over 55, employers still account for more than half (50.9%) of all American entrepreneurs.
To learn more about what motivates and supports these entrepreneurs, SCORE conducted a detailed online survey in February 2021 (as a follow-up to a similar study conducted in February 2020). This original research asks several important questions to explore the business stage of a business owner, their reasons for starting their business, their skills, the obstacles they face, and their access to finance. Some results explore how the COVID-19 pandemic has affected its business operations. For this report, only current small business owners were included. The conclusions were analyzed according to each distinctive group. Here is a summary of some of the main findings by group:
• Even amid the turmoil of COVID-19, immigrants are 40.2% more likely to start a business and are more optimistic about hiring new employees than others.
• Unlike other groups, immigrant employers cite 52.6% of employment discrimination more often as a motivating factor for starting their own business.
• Forty-three percent of immigrant business owners are concerned about finding financing: a rate that is 36.1% higher than that of non-immigrant entrepreneurs.
• Immigrant business owners report that their main strengths are their work ethic / discipline and trust. With more frequent language and cultural barriers, immigrant entrepreneurs are 16.9% less likely to view their communication skills as a strong point. Similarly, they are 19.1% more likely to cite education and 18.1% more likely to cite personal coaching as useful for their business.
• Because they often have little access to credit or lenders, immigrant business owners take advantage of personal finances and credit cards and are 45.1% more likely to use loans from friends and family to support them. to your business.
• Immigrant business owners tend to be much more likely to seek all forms of financial support, let alone receive it. They were rejected with 72-83.5% more often when looking for extended lines of credit, crowdfunding, new investors, online lender support and veteran loans.
• Veterans are 35.4% more likely to start their own business as a supplement to their primary income.
• About 42% of veteran employers surveyed have a service-related disability. Many observe the obstacles they face due to disability or bias.
• Veteran business owners have many more concerns than non-veterans. They are concerned about twice as many business regulations, 25.9% more lack of connections, 23.3% more funding and 14.9% more customer acquisition than veterans.
• Many veterans feel that the military has prepared them well for small business leadership. They report that their biggest strengths are their hard work (75.6%) and their leadership skills (57.7%).
• Surprisingly, veterans take advantage of personal savings at a rate 11.1% higher than non-veteran business owners and were more likely to apply for business credit cards at a rate of 26.3% higher to non-veterans.
• Veteran employers feel less supported by all levels of government (federal, state, local) at a rate that is 10-21% higher than non-veterans.
• Veteran business owners applied for federal, state and state small business administration (SBA) assistance funds at the same rate as other groups. When they did, their applications were denied 20-100% more often than non-veteran employers.
• Compared to younger entrepreneurs, entrepreneurs are still 29.8% more likely to use their businesses to earn extra income and 25.3% less likely to cite financial independence as a motivator.
• Dealing with new technologies is a much higher concern (22% more) for larger business owners (compared to younger ones). On the other hand, they care less about customers, cash flow, or connections.
• Age and experience pay off, as entrepreneurs are still 25.1% more likely to cite their skills for effective business planning as a strong point compared to younger entrepreneurs.
• About 71.8% of employers still feel they have not received support from their local government, while 65.5% feel no support from their state. Less than half (48.9%) reported feeling the support of the local community or the support of the federal government (47.8%).
• Still entrepreneurs finance their business with retirement savings 52.3% more often than younger groups. With this self-sufficiency, they use personal savings, personal credit cards, or friends / family loans less often.
Dean Swanson is a volunteer-certified SCORE mentor and former SCORE chapter president, district director and regional vice president for the Northwest region.