Small-business owners remain optimistic about their success because profits aren't always the definition of success.
Small-business owners are
battling regulatory challenges and the war for talent, factors that are
negatively impacting their bottom line and potentially altering how they vote
in 2012, according to the findings of The Hartford's Small Business
Success Study. Despite high unemployment rates, finding qualified talent
is a challenge for 59 percent of small-business owners, according to the study,
which is based on a survey of 2,000 small-business owners nationwide.
At the same time, 68 percent
say that their business is a consideration when voting, particularly if certain
policies directly impact their business. The majority (70 percent) of small-business
owners feel successful, even as they face challenging conditions, according to
"We developed this comprehensive
study of the nation's small businesses to learn how well equipped they are to
maximize their future success," said Liam E. McGee, chairman, president
and CEO of The Hartford. "Small businesses are the U.S. economy's primary
job creators, and a powerful force-not just economically but also behaviorally.
They carry on the tradition of the driven, confident, creative people who built
"From the study we
learned that most of them expect to be successful in the next two years, even
as they face challenging conditions. Our hope is that the U.S. will foster an
environment that is more hospitable to small businesses. Our country should be
celebrating and liberating entrepreneurs, not burdening them," he said.
Small-business owners remain
optimistic about their success-even in a tough economy-because profits aren't
always the definition of success. In fact, 82 percent say they place great
importance on doing something they feel passionate about and enjoy. Although 77
percent acknowledge that increasing profitability of the business year-over-year
is very important, only 18 percent say this is the most important factor in
defining success. The study also found most small-business owners want to stay
deeply involved in the operation of their business (81 percent), and achieving
a comfortable lifestyle for themselves (79 percent) and their employees (72
percent) is important. An overwhelming majority indicated they enjoy owning
their business (90 percent).
The study's findings also
shed light on the widely held belief that all small-business owners seek to
expand and maximize profitability. In fact, it found that growth is not a
shared goal among all small-business owners. While 52 percent do consider
themselves to be growth-oriented, 48 percent describe themselves as
maintenance-oriented and are comfortable running their business at its current
In spite of the current economic
environment, many small-business owners remain optimistic about their prospects
for success in the short term, with 51 percent projecting that they will be
very successful in the next two years. Only 6 percent predicted they would fail
to achieve success in that time frame. Confidence in their ability to stay in
business is a major factor leading many small-business owners to feel as though
they are currently successful.
The national economy
continues to put pressure on a majority of small-business owners, with 57
percent indicating it has had an impact. When asked what keeps their business
from being successful, small-business owners note that financing their business
is a particular area of pain. Specifically, 34 percent of respondents say that
obtaining a loan or other capital is difficult.
Small businesses are also
challenged by government regulations, which result in greater administrative
and accounting burdens. According to the study, small-business owners identify
economic constraints, such as government rules, regulations and taxes, as the
single biggest factor holding them back (37 percent). And, they say that
uncertainty about how public policy could potentially stunt the future growth
of business is hindering their ability to plan ahead. Other barriers included
rising energy and fuel prices and a lack of customers.