The Highest Performing Entrepreneurs Today - our unsung heroes
Where do we experience the highest performing entrepreneur today? In SCORE’s most recent “The Megaphone of Main Street” publication of business research, it identified three groups of entrepreneurs that consistently outperform others as engines for the small business economy. They start businesses at higher rates and operate more small businesses than others, yet they are consistently overlooked and often climb steeper hills to achieve their goals.
These distinct “unsung entrepreneurs” are: first generation or immigrant entrepreneurs, veteran entrepreneurs, and encore entrepreneurs (those age 55 and older). During the past 25 years, these three groups contributed to overall entrepreneurship at much greater rates than the general population, despite their significant and unique challenges. Their contributions as new business creators have steadily risen. In this installment of SCORE’s Megaphone of Main Street, they paid special attention to these as “unsung entrepreneurs” that have become critical representatives of the current U.S. small business landscape.
While only 13.2% of the U.S. population are first generation immigrants, they represent 20.6% of all U.S. business owners. To a lesser extreme but still notable, veteran business owners play a larger role in the business community, representing 9.1% of all business owners, compared to their smaller (7.6%) population size in the U.S. To a greater extreme, while 21% of the U.S. population is over age 55, encore entrepreneurs represent more than half (50.9%) of all U.S. business owners.
To learn more about what motivates and supports these entrepreneurs, SCORE conducted a detailed online survey in February 2021 (as a follow-up to a similar study conducted in February 2020). This original research asks several important questions to explore a business owner’s stage of business, their reasons for starting their business, their skills, the obstacles they face and their access to financing. Some results explore how the COVID-19 pandemic has impacted their business operations. For this report, only current small business owners were included. Findings were analyzed according to each distinctive group. Here is a summary of some of the key findings by group:
- Even amidst COVID-19 turbulence, immigrants are 40.2% more likely to start a business and are more optimistic about hiring new employees than others.
- Unlike other groups, immigrant entrepreneurs cite job discrimination 52.6% more often as a motivating factor to start their own business.
- Forty-three percent of immigrant business owners are concerned about finding financing: a rate that is 36.1% higher than non-immigrant business owners.
- Immigrant business owners report their top strengths are their work ethic/discipline and confidence. With more frequent language and cultural barriers, immigrant entrepreneurs are 16.9% less likely to consider their communication skills as a core strength. Likewise, they are 19.1% more likely to cite education and 18.1% more likely to cite personal coaching as helpful to their businesses.
- Because they often have little access to credit or lenders, immigrant business owners tap into personal finances and credit cards and are 45.1% more likely to utilize loans from friends and family to support their business.
- Immigrant business owners are generally much more likely to seek all forms of financial support and much less likely to receive it. They were rejected 72-83.5% more often when seeking expanded lines of credit, crowdfunding, new investors, support from online lenders and veteran loans.
- Veterans are 35.4% more likely to start their business as a supplement to their primary income.
- Nearly 42% of the veteran business owners surveyed have a service-related disability. Many note the obstacles they face due to disability or bias.
- Veteran business owners have significantly more concerns than non-veterans. They are twice as concerned about business regulations, 25.9% more concerned about their lack of connections, 23.3% more concerned about financing, and 14.9% more concerned about getting customers than non-veterans.
- Many veterans feel the military prepared them well for small business leadership. They report their greatest strengths are their hard work (75.6%) and leadership skills (57.7%).
- Strikingly, veterans tap into personal savings at a rate that is 11.1% greater than non-veteran business owners and were more likely to apply for business credit cards at a rate that is 26.3% greater than non-veterans.
- Veteran entrepreneurs feel less supported by every level of government (federal, state, local) at a rate that is 10-21% higher than non-veterans.
- Veteran business owners asked for Small Business Administration (SBA), federal and state COVID-relief funds at about the same rate as other groups. When they did ask, their requests were denied 20-100% more frequently than non-veteran business owners.
- Compared to younger business owners, encore entrepreneurs are 29.8% more likely to use their businesses for supplemental income and are 25.3% less likely to cite financial independence as a motivator.
- Dealing with new technology is a much higher concern (22% higher) for older (versus younger) business owners. On the other hand, they worry less about customers, cash flow or connections.
- Age and experience pay off, as encore entrepreneurs are 25.1% more likely to cite their skills in effective business planning as a strength compared to younger business owners.
- Nearly 71.8% of encore entrepreneurs feel they have not been supported by their local government, while 65.5% feel no support from their state. Less than half (48.9%) reported feeling local community support or support from the federal government (47.8%).
- Encore entrepreneurs finance their business with retirement savings 52.3% more often than younger groups. With this self-sufficiency, they less often use personal savings, personal credit cards or loans from friends/family.