Sole Proprietors are Happier on their Own, but Feel Distracted and Overwhelmed Playing Multiple Roles
Says VISA and SCORE “Counselors to America’s Small Business”
Washington, D.C.—Sole proprietors, who make up three-fourths of all small businesses, lack the time and resources to focus on generating new business, according to a new survey from Visa USA and SCORE “Counselors to America’s Small Business.” At the same time, the vast majority say they are happier now than they were at their previous employer, despite working as hard or harder.
“The day-to-day challenges faced by a sole proprietor are often overlooked for broader, universal business issues like healthcare costs and the economy,” said SCORE CEO Ken Yancey. “Yet these individuals make up an overwhelming majority of small businesses that may become larger, well-established brands in the future. It is extremely important to identify and address their needs through education and mentoring programs at an early stage to help them reach their full potential.”
Sole Proprietors Seek to Focus on Generating New Business
Thirty-five percent of sole proprietors say their primary challenge in maintaining and growing a small business is an inability to focus on generating new business, while 27 percent cite stretching themselves across multiple roles and projects. Other challenges mentioned by sole proprietors include:
- limited resources (23 percent)
- lack of time to focus on their passions (23 percent)
- difficulties in running their businesses efficiently (23 percent)
“Small business owners—and sole proprietors in particular—are constantly juggling multiple projects, conflicting priorities and limited resources as they maintain and grow their businesses,” said Howard DeBow, vice president of marketing, Visa USA. “By providing small businesses with tools that make it easier to manage their finances, Visa is committed to helping business owners focus on what matters most—their business goals and personal passions.”
Most Would Hire for Growth, but Distrust Lingers
Of the 1,000 sole proprietors surveyed, 52 percent said that, with the help of an additional employee, generating new business would become a focal point and personal priority. Sole proprietors say they would use their newly available time to:
- evaluate and address their businesses’ weaknesses/areas needing improvement (32 percent)
- focus on activities that they are most passionate about (26 percent)
Respondents stated that they would delegate marketing (28 percent), sales (26 percent) and operations (25 percent) responsibilities to a new hire. Only five percent said they would have their new employee handle their company’s financial duties.
When asked what prevented them from hiring an additional employee, 69 percent cite a lack of available budget;16 percent cite work-style personality; and 13 percent say distrust or an unwillingness to share the workload keep them from adding to their team.
Women & Men Cite Different Reasons for Starting their Own Business
Most sole proprietors (69 percent) agree that flexibility to create their own schedule and work environment was a reason they originally went into business for themselves, followed by the freedom to operate as the main decision-maker. Women cite “flexibility to create their own schedule and work environment” as a reason for going into business alone (72 percent of women vs. 63 percent of men), whereas men cite the promise of “freedom to operate as the main decision maker” (54 percent of men vs. 46 percent of women).
Predictably, a vast majority of sole proprietors say they are happier now running a small business than they were at their previous employer (83 percent). However, nearly two-thirds (60 percent) say they work more or about the same as working for an employer.
“Hired for You” National Promotion
Recognizing the unique needs and challenges facing small businesses and sole proprietors, Visa has launched “Hired for You,” the company’s first national promotion targeting small businesses. From August 1 to September 30, 2006, Visa is offering one small business the opportunity to win the services of a new employee for a year and $50,000 worth of merchandise and services. Ten first prize winners also will receive $2,500 worth of business essentials. Small business cardholders will be automatically entered into the contest every time they use their Visa Business card. Alternatively, cardholders also can visit www.visa.com/hiredforyou to register to win and view educational resources and tips.
“Since entering the small business arena, Visa has used product innovation and an aggressive marketing approach to help grow our market share,” added Visa’s Howard DeBow. “The ‘Hired for You’ national promotion, along with an ongoing series of national print, television and radio advertisements, will further reinforce and raise awareness of the products and services Visa offers to help small businesses grow.”
The “Hired for You” national promotion will be supported by an integrated marketing campaign that includes online advertising, a microsite and member/merchant marketing materials. More than 50 member financial institutions that share Visa’s interest in targeting small businesses will be participating in the national promotion through statement inserts, direct-mail pieces and point-of-sale communications.
Small Business Opportunities
According to Visa USA research, small businesses spend approximately $4.7 trillion annually, $300 billion of which is spent on personal and business payment cards. Small businesses represent a lucrative and growing target segment for Visa and its stakeholders as a clear opportunity exists to replace costly processes (paper checks, invoicing) with more efficient electronic payments.
Visa USA recently announced that, for the first time, small business spending on Visa Business cards (sales volume) in the United States surpassed $100 billion over a 12 month period. For the four quarters ended June 30, 2006, small businesses made $103.5 billion in purchases with their Visa Business cards, representing a year over year growth rate of 32.2 percent. For the second quarter of calendar year 2006, small business spending on Visa Business cards totaled $28.9 billion, a 29.9 percent increase over the same period last year.
Visa’s position in the commercial market segment also has been acknowledged by an independent research report, Packaged Facts, which recognized Visa as the largest commercial card brand by charge volume and number of cards, driven largely by gains in the small business category.
About the Survey
Survey findings are based on a national online survey of 1,000 small business sole proprietors age 18 and over. The survey was conducted using Survey Sampling International’s SurveySpot nationwide Internet panel. Survey respondents were required to own and manage their own business and employ no other workers. The poll was conducted from July 17 to July 25, 2006. The survey results have a margin of error due to sampling of no more than plus or minus 3 percentage points at the 95 percent confidence level.
Since 1964, SCORE “Counselors to America’s Small Business” has assisted more than 7.3 million aspiring entrepreneurs and small business owners through counseling and business workshops. More than 10,500 volunteer business counselors in 389 chapters serve their communities through entrepreneurial education dedicated to the formation, growth and success of small businesses. For more information about starting or operating a small business, call 1-800/634-0245 for the SCORE chapter nearest you. Or, visit SCORE on the Web at www.score.org.
About Visa USA
Visa USA is the nation's leading payment brand and largest payment system, enabling banks to provide their consumers and business customers with a wide variety of payment alternatives tailored to meet their evolving needs. Visa USA is committed to increasing the choice, convenience, acceptance and security of Visa payments for all stakeholders in the payment system — members, cardholders and merchants. Through its 13,432 member financial institutions, more than 510 million Visa-branded cards have been issued to cardholders in the United States. Last year, U.S.-based financial institutions relied on Visa's processing system, VisaNet, to facilitate $1.6 trillion in transactions with unparalleled reliability.
Contact: Steve Hickok Nina Johnson
Fleishman-Hillard for Visa USA Fleishman-Hillard for Visa USA