John D., a 50-year-old father of four, owns a six-person IT consulting business serving companies ranging from start-ups to the Fortune 500. He followed his dream of starting a small business that allowed him closer contact with customers – and more time with his kids– after leaving a senior management position at a major information services firm.
Suvit S., 50, who immigrated to the United States from India, left 20 years in banking to start a nutraceutical importing business based on his long-held belief in the value of holistic health and natural remedies.
Manuel S., 32, a Hispanic-American, realizes more financial independence as the owner of four T-Mobile franchises throughout Long Island than he did as a stockbroker with a major financial services firm.
Brendon N, 25, parlayed the web design and programming experience he gained at his father’s company into a lucrative file transfer service that allows large medical files to be sent safely and in compliance with HIPAA.
Harry H., 70, a recent retiree, started a new life in his twilight when, after leaving a 30-year career as a mechanical engineer at a Fortune 500 firm, he invented a hydraulic oil purifying system for large automotive and manufacturing firms.
While most people think of typical small business owners as men between the ages of 34 and 49, the individuals profiled above tell a different story. According to recent predictions from Intuit about the future of small businesses, “Entrepreneurs will no longer come predominantly from the middle of the age spectrum. People nearing retirement and their children just entering the job market will become the most entrepreneurial generation ever.” In fact, according to the Kauffman Foundation, Americans aged 55 to 64 create small businesses at a rate that is 28 percent higher than the adult average. And Generation Y, ages 5 to 25, has many of the traits needed to be a successful entrepreneur: They are critical and conceptual thinkers; value autonomy; embrace a networked approach to work and social life; and are willing to adapt or re-invent as needed.
Add in women, immigrants and minorities, and the small business landscape promises to look much different in the next decade:
There are many reasons women in midlife often start small home-based businesses; among them: they are seeking economic independence after a divorce, need a better work/life balance, realize that a second income would improve the family’s cash flow, or want to achieve more success than allowed by the “glass ceiling” they faced in the corporate world. Since they often hold advanced degrees, women small business owners tend to create small businesses in the financial services, education and health sectors.
Individuals who have immigrated to the U.S. – most often from India, the UK, Canada and Japan – are known for being high-impact, high-tech entrepreneurs. They are able to create successful small businesses because they are typically highly educated, experienced and have a strong network in their countries of origin. According to the U.S. Census Bureau, immigrants represent the fastest-growing segment of small business ownership today.
Finally, small businesses owned by minorities – particularly Hispanics like the T-Mobile franchise owner profiled above– saw strong job creation in 19 states during the pre-recession period of 2002-2006. Since many of these are smaller enterprises, i.e. with less than $50,000 in receipts, the minority small business sector is seeing more expansion and higher rates of job creation. Significantly, the total number of black-owned businesses is growing at a rate of more than four times the national average.
Many people look at successful small business owners like these and wonder how they got the courage to leave secure jobs at major corporations to pursue entrepreneurial ventures. To someone who values the predictability of being a salaried employee, the uncertainty of working for oneself might seem unthinkable. They may wonder how small business owners do it.
The answer is that small business owners, at least successful ones, are different in personality traits and temperament than the rest of the “nine-to-five” working population. Research suggests that they are willing to collaborate and delegate tasks to others, while they focus on the future, i.e. by making cash flow and succession plans. As optimists they often perform best in the face of adversity or extreme pressure, and are not cowed by obstacles like new competitors or economic downturns. And their optimism is often tempered by a healthy dose of cynicism and anxiety.
No matter where you are as a small business owner – thinking of becoming one, taking stock of your current situation, or looking to refocus for the future -- it is a useful exercise to do some self-assessment to see if you have what it takes for the long haul.