The last few years since the economic recovery began have largely been good ones for small businesses. While they could have also been better, this seems not to have dampened entrepreneurs' expectations for future improvements.
Through the end of last year, just 37 percent of small business owners said they've had no problems in getting their companies off the ground, down from 40 percent a year earlier, but for very different reasons, according to a new survey from the Kauffman Foundation and LegalZoom. For instance, 28 percent of those polled said their biggest issue in doing so was a lack of access to credit, and 36 percent cited unpredictability in their markets. Those numbers are down from 45 percent and 55 percent, respectively, at the end of 2012.
These indicate some pretty positive conditions in the market for those looking for credit, in particular, especially because more owners were putting their own money into companies while simultaneously relying more on bank financing, the report said. In all, 86 percent of owners said they've put their own money into their companies, while 6.5 percent received funding from lenders. Those are both up from 66 percent and 4.5 percent a year earlier.
"Entrepreneurs are on the economy's front lines daily," said Dane Stangler, vice president of research and policy at the Kauffman Foundation. "The fact that the survey shows small, positive growth among these companies suggests that economic recovery may be gaining vibrancy on a broader scale, as well."
A shift in demographics
In the last few years, the kinds of people who started their own businesses has changed appreciably, the report said. For instance, 35 percent of those polled in this survey were female, up from 31 percent a year earlier. Moreover, fewer young people and younger baby boomers were involved in starting their own businesses, as those between 18 and 29, and 50 and 59 years old, came up in the survey. At the same time, there was an uptick in the number of small business owners between 30 and 39 years old, as well as those 60 or older.
Owners who want to succeed in this new environment may want to take the time to reduce their costs overall, and this could include finding more affordable small business insurance coverage. Shopping around for liability insurance and other such policies can end up saving companies thousands of dollars per year overall.