Who are today’s small business owners? According to research from accounting software company Xero, they may be younger than you think.
Young entrepreneurs
Xero’s survey of 1,000 small business owners seems to indicate that self-employment is an increasingly attractive option for younger people, rather than something left until they have gained more experience.
69% of new businesses set up in the past five years have been started by those aged between 18-34, and the survey found that the young business owners in this age group decided they wanted to be their own boss at just 20.
That’s quite a contrast to small business owners aged over 45, who made the same decision at 35. On average, people decide to start up their own business at 27.
Humble beginnings and big dreams
The survey also revealed some of the reasons they take the plunge:
- 36% wanted to gain more flexibility
- 35% wanted to take more control
- 23% didn’t enjoy working for someone else
- 19% wanted to make their family proud
Has following their dream worked out for them? 82% said yes: they were running the business they had always dreamed of, and 9 out of 10 that it was one of their greatest accomplishments.
And the best thing about running their own business?
- 51% said: being their own boss
- 38% feel it helps them control their work/life balance
- 35% love being able to do things in the way they want to
The factors for small business success and failure
Sadly, not all small business owners manage to make their start-up a success. Xero’s research revealed that only 14% of failed small businesses used software to manage their finances, compared to 58% of successful businesses, while only 20% spent money on marketing campaigns (compared to 49% of successful businesses). And a fifth of small businesses were launched without a business plan.
When asked about the biggest barriers to success, respondents named:
- Making the right hires (32%)
- The inability to switch off (29%)
- Late payments (29%)
With hiring the right people causing such an issue, it’s no surprise that eight out of 10 small business owners said they got the help they needed to launch from family and friends, chiefly because they can trust them (35%), they understand each other (34%) and they know they will be committed (28%).
So what advice do these entrepreneurs with they’d been given at the beginning?
- To be adaptable (31%)
- To put accounting support in place right from the start (23%)
- To network with inspiring people and peers (22%)
Gary Turner, MD and co-founder of Xero, commented: “Small business owners don’t always have an easy run of it. But, despite this, every day I see just how passionate and eager they are to turn their dreams into realities. While this passion is fantastic, it will only get you so far. We know that survival rates of small businesses with watertight business plans and the right processes are far greater than those who fail to put the right provisions in place – so it would be a huge shame to see this enthusiasm go to waste.”
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