Guest column: 3 groups of entrepreneurs outperform as drivers of the small business economy – Albert Lea Tribune
Guest column by Dean Swanson
Where do we meet the most successful entrepreneur today? In SCORE’s most recent publication titled “The Main Street Megaphone” of business research, he identified three groups of entrepreneurs who consistently outperform others as drivers of the small business economy. They start businesses at higher rates and operate more small businesses than others, but they are constantly overlooked and often climb steeper slopes to achieve their goals.
These distinct unrecognized entrepreneurs are first generation or immigrant entrepreneurs, seasoned entrepreneurs and recall entrepreneurs (aged 55 and over). 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 founders of new businesses have steadily increased. In this episode of SCORE’s “Megaphone of Main Street,” they paid special attention to the latter as unsung entrepreneurs who have become essential representatives of today’s small business landscape in the United States.
While only 13.2% of the US population are first generation immigrants, they represent 20.6% of all US business owners. At a lesser but still notable extreme, seasoned business owners play a larger role in the business community, accounting for 9.1% of all business owners, compared to their smaller population (7, 6%) in the United States. As the US population is over 55, recall entrepreneurs make up over half (50.9%) of all US business owners.
To find out more about what motivates and supports these entrepreneurs, SCORE conducted a detailed online survey in February 2021 (following on from a similar study conducted in February 2020). This original research asks several important questions for exploring a business owner’s stage of business, their reasons for starting a business, their skills, the barriers they face, and their access to finance. Some results explore the impact of the COVID-19 pandemic on their business operations. For this report, only current small business owners have been included. The results were analyzed according to each distinct group. Here is a summary of some of the main findings by group:
• Even amid the COVID-19 turmoil, immigrants are 40.2% more likely to start a business and are more optimistic than others about hiring new employees.
• Unlike other groups, immigrant entrepreneurs 52.6% more often cite discrimination at work as a motivator to start their own business.
• Forty-three percent of immigrant business owners are concerned about seeking financing: a rate that is 36.1% higher than non-immigrant business owners.
• Immigrant business owners state that their main strengths are their work ethic / discipline and their confidence. With more frequent language and cultural barriers, immigrant entrepreneurs are 16.9% less likely to view their communication skills as a core strength. Likewise, they are 19.1% more likely to cite education and 18.1% more likely to cite personal coaching as useful to their business.
• Because they often have limited access to credit or lenders, immigrant business owners tap into their personal finances and credit cards and are 45.1% more likely to use loans from friends and family. their families to support their business.
• Immigrant business owners are generally much more likely to seek all forms of financial support and much less likely to receive it. They were turned down 72-83.5% more often when finding extended lines of credit, crowdfunding, new investors, online lender support, and veteran loans.
• Veterans are 35.4% more likely to start a business to supplement their main income.
• Almost 42% of senior business owners surveyed have a service-related disability. Many note the barriers they face due to their disability or prejudice.
• Veteran business owners are much more concerned than non-veterans. They are twice as concerned about regulating business, 25.9% more concerned about their lack of connections, 23.3% more concerned about funding and 14.9% more concerned about getting customers than non- veterans.
• Many veterans feel that the military has prepared them well for small business leadership. They report that their greatest strengths are their hard work (75.6%) and leadership skills (57.7%).
• Strikingly, veterans tap into personal savings at an 11.1% higher rate than non-veteran business owners and were more likely to apply for business credit cards at a rate of 26% higher. , 3% to that of non-veterans.
• Veteran entrepreneurs 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 have requested COVID relief funds for the Small Business Administration (SBA), federal and state, at about the same rate as other groups. When asked, their requests were denied 20-100% more often than non-veteran business owners.
• Compared to younger business owners, recall entrepreneurs are 29.8% more likely to use their business for additional income and are 25.3% less likely to cite financial independence as a motivator.
• Managing new technology is a much higher concern (22% higher) for older business owners (compared to younger ones). In contrast, they worry less about customers, cash flow, or connections.
• Age and experience pay off, as recall entrepreneurs are 25.1% more likely to cite their effective business planning skills as a strength compared to younger business owners.
• Almost 71.8% of recall entrepreneurs feel they have not been supported by their local government, while 65.5% feel no support from their state. Less than half (48.9%) said they felt support from the local community or support from the federal government (47.8%).
• Encore entrepreneurs finance their businesses with retirement savings 52.3% more often than younger groups. With this self-sufficiency, they less often use personal savings, personal credit cards or loans from friends / family.
Dean Swanson is a SCORE Certified Volunteer Mentor and Past SCORE Chapter President, District Director and Regional Vice President for the Northwest region.