WASHINGTON – The United States is experiencing a boom in entrepreneurship, and new research released today by the Small Business and Entrepreneurship Council (SBE Council) uncovers the motivations, challenges, and outlook of new entrepreneurs who launched their businesses during the pandemic. A survey of these new small businesses found that many are concerned about the direction of government policies -specifically, those targeting America’s largest technology companies and the adverse impact these will have on their business’ sales and operations. The full report can be found here.
“Fortunately, there is good news to report from these new entrepreneurs. Business ownership appears to be working for many, as 71% are satisfied with the growth they have achieved for their business and 91% believe that their business will succeed within the next two to three years. But there are clear warning signs on the policy front. These new entrepreneurs view possible regulatory actions focused on technology companies as harmful, and would undercut their ability to compete and drive sales,” said SBE Council President & CEO Karen Kerrigan.
When these new business owners launched their firms, 60% described the economy as not favorable and 78% viewed their market as competitive.
“Despite the great risk and competitive market, many of these new entrepreneurs saw an opportunity, and technology and technological tools have been critical to their risk-taking and success,” added Kerrigan.
More than two-thirds (68%) of respondents use online platforms and marketplaces operated by Google, Facebook, Apple, Amazon, and Microsoft, and they expressed concern about how possible regulations and legislation would impact their access to consumers while imposing new costs on their firms. These U.S. technology leaders are the targets of a 2021 White House executive order calling for increased tech regulation, as well as proposed bills in Congress, including the American Innovation and Choice Online Act (S. 2992) and the Platform Competition and Opportunity Act (S. 3197).
The survey of small business owners who started their businesses between 2020 and 2022 found that:
● Only 5% agreed that “Congress’s policies are helping the economy and small businesses like mine.” 59% said Congress’s policies are hurting the economy and small businesses.
● Eight in ten respondents said less regulation by President Joe Biden was “very” or “somewhat” important for their business to succeed. Only 9% believe President Biden’s policies “make it easy to start and grow a business.”
● 61% of respondents were “very” or “somewhat” concerned that government regulations against America’s largest technology companies would negatively affect their businesses.
● Respondents are most concerned with losing access to free services and increased costs to access and retain customers.
“It’s clear that these new entrepreneurs appreciate the services large technology companies offer that enable them to affordably reach their customers. These owners worry losing access to these free or affordable services will interfere with how they run their businesses,” said Kerrigan. “Instead, our research found that these business owners largely want President Biden and Congress to focus on the urgent issues of taxes, inflation and supply chain challenges.”
The survey found that new small business owners consider inflation, access to capital, and President Biden’s policies to be the three top impediments to their businesses. When asked what issues were important for President Biden to address to help them succeed, the top three cited by new small business owners are lowering taxes and a simpler tax system, inflation, interest rates, and supply chain issues. Access to capital, incentives to invest in startups, affordable health coverage, less regulation, and labor shortages are also categorized as important.
“Business owners are overwhelmingly relying on their savings to fund their businesses,” said Kerrigan. “Three-quarters of respondents used their savings as initial capital, with just 10% using small business loans and 1% using venture capital. This shows just how much is at stake for these entrepreneurs.”
Methodology: TechnoMetrica market intelligence screened and recruited potential respondents by phone for the study from January 26-March 6. Qualified respondents received email invitations to take part in an online survey. The national study includes responses from 316 business owners. The margin of error for the survey is +/- 5.6 percentage points at the 95% confidence level.
About SBEC
SBE Council is an nonpartisan advocacy, research, and education organization dedicated to protecting small businesses and promoting entrepreneurship. For 28 years, SBE Council has worked on and advanced a range of private sector and public policy initiatives to strengthen the ecosystem for strong startup activity and small business growth. Visit www.sbecouncil.org for additional information. Twitter: @SBECouncil
