Despite the stress of sixty-hour work weeks and constant financial pressures, Canada’s small business owners still say running your own show is the way to go.
For them, the excitement and personal fulfillment of entrepreneurship far outweigh the many sacrifices they have to make to achieve their dreams. These are the conclusions of a new study conducted by American Express in which small business owners profess they have no regrets about going it alone.
While many decide to set out on their own with visions of striking it rich, the results show most entrepreneurs place a higher premium on independence when it comes to the motivation for starting up their own firm. Above all, they want to be their own boss and call the shots when it comes to the direction their professional and personal lives take.
“Many people are clearly choosing to go it alone as an escape from the politics and frustrations of big business. They are looking to pave their own path, rather than leaving it in the hands of someone who has little stake in their future,” states Debra Ambrose, head of Small Business Services at American Express.
But Amex’s study suggests that going it alone is not for the faint-hearted. It paints a picture of high-pressure and commitment; of a lifestyle where work is the dominant factor, and where even leisure activities tend to become business-related.
What do they give up?
——————— There’s no question that running a business demands an enormous degree of dedication. Still, many entrepreneurs are caught off guard by the level of effort and sacrifices that are required to get a business off the ground and keep it afloat. Only a tiny handful of those polled said managing their operation ended up being easier than expected. In fact, more than half indicated that it was more work than they bargained for, with nearly 80 percent admitting that running their business is stressful.
According to the Canadian Federation of Independent Business (CFIB), the issues that cause small business owners the most headaches are administration, financing, government compliance and taxes.
Added to this is a level of financial uncertainty that self-employed individuals regularly contend with. In the Amex study, several respondents confessed that they miss the stability of a steady pay cheque and worry about their future financial security.
On top of these business concerns, the study found that entrepreneurs must struggle with the impact running a business has on their personal lives. Fully half of those polled felt that their work demands too much of their time since they are obligated to be personally involved in everything that impacts their operation. Many also worry about the amount of quality time they are able to spend with their family.
So what keeps them going?
————————- True to the spirit of entrepreneurship, business owners have a strong will to succeed and rely on their own passion to stay motivated in spite of the daily pressures. In sync with their original motives for going it alone, the survey shows that the vast majority of entrepreneurs continue to be driven primarily by the satisfaction of being independent.
For many, it’s also the pure enjoyment of their work, and the ambition of a financially-rewarding future that keep them pushing ahead. Others turn to their friends and family for encouragement, with several respondents – particularly those with a number of years invested in their business – citing a strong commitment to their employees and customers as their inspiration to keep going.
“Entrepreneurs are the epitome of dedication and commitment. They have a genuine passion for their work, a loyalty to their business and their staff, as well as a strong drive to build something of their own,” says Ambrose. “It is clear that, for them, it’s not just winning that counts, it’s the thrill of the game.”
But is it all work and no play?
——————————- A nine-to-five day at the office is a rarity for most small business owners. In fact, the majority put in more than 50 hours of work per week, with almost 30 percent clocking over 60 hours. Yet, few consider themselves “workaholics” – evidence of just how much of a driving force work is in their lives. In fact, one-third of those polled admit they don’t indulge in leisure activities, citing that they simply don’t have enough time to spare for anything that’s not work-related.
On the whole, though, leading a balanced life is important for business owners, with most trying to squeeze in time for play whenever possible. However, since time is at such a premium, some end up combining their leisure activities with business opportunities. A round of golf, going to a ball game, or going out to dinner are often used as a means of building relationships with business contacts.
Would they do it again?
———————– Nearly 75 percent of those polled feel well-rewarded for their hard work, with three in five saying they enjoy a better quality of life since starting up their business. In fact, the vast majority of business owners would do it all over again if given a second opportunity. Over 90 percent of respondents said they are generally happy with the way things have worked out since venturing out on their own.
Small business owners are also remarkably buoyant about the future, with four in five intending to continue working at the same frenetic pace or even harder to expand their businesses. Very few of those polled said they want to slow down and relax more, and even less are thinking about packing it in to retire early. These findings are supported by a recent CFIB study which showed that the number of small firms expecting to grow in 1999 outnumbered those that see a decline by a margin of three to one.
“The small business sector is a vibrant and integral part of our country’s economic future. Owners of these firms deserve a lot more credit and recognition,” says Ambrose, adding that the “Risks and Rewards” study is part of Amex’s increasing attention to the needs of this thriving market. The study follows the charge and credit card company’s October 1998 announcement that it would be putting significant resources behind the development and marketing of new products and services to expand its customer base among the more than two million small and home-based businesses in Canada.
Ambrose continues, “Along with practical financial support, Amex will focus on developing special travel and rewards programs for small businesses — helping to create opportunities for entrepreneurs to make the most of their limited leisure time.”
As part of that effort, the company has signed on as a Sponsor in the newly expanded AIR MILES for Business Program(TM) launched today by The Loyalty Group in Toronto. The program rewards small business owners for their everyday business spending in addition to their personal spending. On top of that, AIR MILES(R) Business Collectors are eligible for exclusive Business Sponsor bonus mile offers and unique rewards tailored to meet the needs of small business owners. Other Sponsors in the program include AT&T Canada, UPS, NEBS Business Forms, Holiday Inn and Liberty Health.
American Express in Canada operates as Amex Canada Inc. and Amex Bank of Canada. Amex Canada Inc. is a leading provider of travel related services in Canada and assists companies in managing and controlling their business and travel expenses. Amex Bank of Canada is the issuer of American Express Cards in Canada. Both companies are wholly-owned subsidiaries of the New York-based American Express Travel Related Services Company, Inc., the largest operating unit of American Express Company, which provides a wide range of financial and travel related services for consumers and companies.
THE RISKS & REWARDS OF GOING IT ALONE
An American Express Survey of Small Business Owners in Canada
Key Facts & Findings
————————————————————————- – 93% of small business owners are generally happy with the way things have turned out since going into business for themselves. The remainder admit they wouldn’t do it again.
– The top three reasons for going it alone are: being your own boss and having control over decisions (89%), making better use of your skills and knowledge (86%), followed by the potential for financial rewards (70%).
– While men are more likely than women to be motivated by the chance of making money (66% vs. 51%), women are more inclined to do a job that fits well with their home and family life (74% vs. 57% of men).
– It’s the same satisfaction of being independent (65%) and the ambition of a prosperous future (23%) that keep small business owners motivated in spite of the daily pressures. Nearly 30% also cite the pure enjoyment of their work as a significant driver to keep going.
– Seven in ten feel well-rewarded for their hard work.
– Almost 60% say they enjoy a better quality of life since starting up their business.
– Over 75% of small business owners find running their business stressful.
– More than half say the effort they’ve had to put into their business is more than they bargained for. A mere 3% feel that going it alone ended up being easier than expected.
– 60% of small business owners put in more than 50 hours of work per week, with one-quarter of these clocking over 60 hours. Only 13% put in a regular 40-hour week or less.
– 50% feel that their business demands too much of their time. As a consequence, nearly two in five say the amount of quality time they are able to spend with their family has suffered.
– Less than one-third (30%) of small business owners describe themselves as “workaholics”.
– One-third admit they don’t indulge in leisure activities. Of these, the majority (67%) cite that they simply don’t have enough time to spare for anything that’s not work-related.
– Of the 70% who do squeeze in time for leisure activities, most (50%) prefer to spend it on the golf course or taking part in other sports. Other favourite pastimes include travel (47%), hobbies (35%), going out to dinner (29%), and spending a night at the movies (16%).
– One-third (36%) find it difficult to relax in their time off.
– More than 40% plan to expand their enterprise through diversification or by growing staff and sales. Only 14% want to slow down and take things easy for a while.
Telephone interviews were conducted with 305 American Express Small Business customers throughout Canada in February 1999. The majority had been in business for more than five years, and covered a broad range of industries, including retailing, manufacturing, business services, and agriculture. On selected key issues, responses were combined with the results of a similar Members’ survey conducted by the Canadian Federation of Independent Business (CFIB), thereby increasing the sample size in these cases to 636. The questions that apply are: Hours worked per week, Amount of effort put into business, Key motivators for becoming self-employed, Agreement with challenges and rewards of self-employment.Details