Small business owners: Why did they start the business, would they do it again and do they take vacation?
Interise launched its Small Business Survey Panel in June 2020. The Panel is over 500 members strong and is representative of the Interise network of 9,000+ small business owners. Small businesses face uniquely dire and often fast evolving circumstances under COVID-19 and the resulting economic crisis. Interise established the Panel to collect monthly information about these impacts and the ways in which small businesses are coping and pivoting to keep their businesses afloat and their employees on payroll.
A long term goal of the Interise Small Business Panel is to build a nationally representative sample of small businesses to expansively represent the voice of small business. The panel would be of sufficient size to segment data by various socioeconomic characteristics, such as race, ethnicity, sex; and by business characteristics including industry, size of business (by revenue and employees), and location.
Celebrating small business owners
New questions asked in last month’s survey touched on the business ownership experience and taking vacation time. Interise asked respondents to choose one or more reasons why they started or purchased their business. We also asked whether they would start or purchase their business again. Lastly, we asked when was the last time respondents took a vacation or stay at home vacation given pandemic travel concerns longer than a few days. We also asked business owners open-ended questions to both share a piece of advice they would give to someone thinking about starting a business, and for anything else they wanted to say about business ownership.
Hearing from business owners about their motivations for starting or purchasing their business and why they would or wouldn’t do it again was very insightful. Each respondent shared part of their “why” and how it has evolved with their experience leading their organization. Taking vacation time to step away from day-to-day responsibilities, for however long, is important for any worker’s mental health. It’s especially crucial for business owners to be mindful of, given the many pressures they experience. An OnDeck survey from 2014 found that 57% of small business owners planned to take a vacation that year, and among those that did 61% planned to take just five days off compared with the 10 paid days the average private sector employee receives. Given how all-consuming and isolating their role can be, business owners have to intentionally plan and make time to nurture themselves or else it so often doesn’t happen. This can lead to exhaustion and burnout, with potentially serious consequences for both the business and the owner over time. This is especially true in the wake of pandemic-induced business disruptions.
Panel analysis findings
Before we jump into the theme related data, short term optimism for the next three months continued to climb from 44% moderately or very optimistic in February to 50% in March and 65% in April. Also, Black respondents were 2.5x more likely to be “very optimistic” about the next three months than white respondents, at 44% and 17% respectively. This optimism is exciting as business owners plan ahead for lifted restrictions.
Overall, respondents started or purchased their businesses for a variety of reasons:
- 36% had a vision for a business,
- 36% wanted to be their own boss,
- 29% had an opportunity present itself,
- 28% wanted to pursue a passion,
- 10% had another reason,
- 9% were dissatisfied with their job, and
- 8% lost their job.
Overall, when asked whether they would start or purchase their business again, 81% of respondents said they would, 12% were unsure, and 7% said they wouldn’t. We grouped open text explanations of why respondents would do it again by themes and found that the largest category or 27% of respondents wrote about the importance of their mission and making a positive impact. One respondent said “I believe in creating memories for families and as a photographer, I am able to provide them with keepsakes that will last generations.” 23% of respondents appreciate the control over their business’ creative vision, with one respondent saying “I like imagining new and better things/programs that could exist and then making them happen.” 15% expressed passion about what they do as reason enough to do it again, even if they could work for someone else and potentially even make more money than they are now as a business owner.
When panel respondents were asked about the last time they took a vacation, or a stay at home vacation given pandemic travel concerns…
- 35% said within the last 6 months,
- 16% said between 7 and 12 months ago,
- 22% said between 1 and 2 years ago,
- 17% said between 2 and 3 years ago, and
- 10% said more than 3 years ago.
Analyzing the responses to this question by race showed that while 20% of white respondents took a vacation in the last 7-12 months, only 8% of Black respondents did so. Comparatively, for 6% of white respondents and 17% of Black respondents it had been more than three years since their last vacation. Nearly this entire difference in time off during the last 7-12 months was accounted for in Black respondents not having taken time off in more than three years. Breaking the responses down by gender identity showed 44% of men responded that they took a vacation within the last 6 months, compared with 26% of women. 32% of women responded that they hadn’t taken a vacation in at least 2 years, compared with 22% of men.
When asked for a piece of advice to someone thinking about starting a business, 18% of respondents said something about maintaining a long-term mindset, scaling gradually, or being patient. One example response was “plan on the journey, not a sudden ‘win’.” 18% also commented on the importance of having a plan, or having a plan but being flexible. 15% of respondents mentioned having a mentor or network of people who can help you. Other general things respondents shared about business ownership emphasized asking for help and surrounding yourself with experts, working hard, general positivity, and doing research about the market and industry.
Hearing from so many small business owners about their “why” offers important insights considering their contributions to the economy and the risks and challenges they face. Regardless of when Small Business Week is celebrated, we at Interise celebrate hard working small business owners every week!