What makes someone start a small business?
There are plenty of traits that go into being an entrepreneur, that’s for sure. For starters, if you want to start a business, you better have a lot of initiative. The fact of the matter is no one is going to tell you what to do, or what you should do, once you start your own business. You need to be able to come up with ideas and follow through on those ideas, all on your own.
Which leads to the next two required traits:
- Creativity: When you read about entrepreneurship, this is an often overlooked trait, but in my experience, an essential one. It takes creativity to come up with a viable business idea, marketing plans, employee retention strategies, and all the rest.
- Work ethic: Yes, we are all working very hard these days, but small business owners work that much harder. The willingness to put in the time necessary and to do whatever it is that is needed is one thing that distinguishes the successful small business owner.
Other things that go into the small business equation include willingness to live with uncertainty, risk-taking, and fortitude.
But I would suggest that the No. 1 requirement is confidence.
To leave your job that has the comfort of a regular paycheck and benefits, to use your money to come up with a vision and then move mountains to bring it to fruition requires one thing: Confidence. Confidence in yourself, confidence in those around you, and confidence in the economy as a whole are necessary to take the risks needed to create a startup.
That sort of entrepreneurial bullish confidence is one of the things that make this country great.
And it is just that sort of confidence that we see in the Fall 2015 Bank of America Small Business Owner Report. The SBOR is a fascinating survey. Twice a year since 2012, Bank of America has taken the pulse of 1,000 small business owners and come away with some really interesting results.
In the latest edition of the SBOR, we see small business confidence on display in spades. Consider these impressive stats:
- Nearly eight in 10 (78%) of small business owners are reporting plans to grow their business over the next five years
- Nearly three-quarters (72%) of small business owners say they expect their revenues to increase in the upcoming year
- Millennials are the most optimistic generation, with 80% expecting an increase in revenues and 88% saying they planned on growing their businesses over the next five years. And Baby Boomers are the generation “least likely” to say they plan on growing their business. But still, the majority (56%) of them say they planned on doing so. What about Gen-Xers? They are a very confident lot too – 86% plan on growing their business in the next few years
Consider too this amazing statistic from the latest SBOR: “Small business owners’ confidence in the national economy rose 11% year-over-year, from 45% in 2014 to 56% in 2015, representing the highest increase since the inception of our survey in 2012.” (Emphasis added.)
Talk about confidence.
To me, the one thing that indicates whether a small business owner is truly confident relates to, not surprisingly, money. The willingness to take out a loan is the surest sign I know of that someone is confident in both themself as well as the economy as a whole. Entrepreneurship, after all, requires the willingness to take a risk with money to make money. If someone is truly willing to do that, he or she is truly an entrepreneur.
And once again, that is precisely what this edition of the SBOR indicates. “More small business owners intend to apply for a loan in 2016 than in previous years, with one in three (35%) indicating intent to apply for a loan in 2016, a considerable (11%) jump year over year. In addition, the number of small business owners who report they have applied for a loan in the past two years has increased by more than 50%in the last 12 months, rising from 29 to 44%.”
With loan applications expected to jump by a whopping 11% this year alone, and one in three small business owners intending to take on debt to grow their business, we are seeing this natural confidence of small business owners heading to new heights, and that’s good news for all of us.
Indeed, it’s great that small business owners tend to be a very confident group, but it’s even better that there’s a lot to be confident about these days.
About Steve Strauss
Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest,The Small Business Bible, now out in a completely updated third edition. You can listen to his weekly podcast, Small Business Success, visit his new website TheSelfEmployed, and follow him on Twitter. © Steven D. Strauss.
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