Nearly two-thirds (64 percent) of small businesses in the United States start with less than $10,000 in capital, primarily funded from the founder’s personal savings, according to a report by Intuit.
Just 13 percent of survey respondents said they had $50,000 or more in funding to start their business, and just 17 percent said they had a formal education as a source of external guidance during the first year in business.
A little under half (46 percent) of small-business owners surveyed said the first year is the most difficult year, while 19 percent said it was about the same as other years.
When asked what they’d do different if given the chance when first starting out, 67 percent said they would write a better business plan, 65 percent said they would spend more time and money on marketing, and nearly half (49 percent) said they would find a mentor.
Small businesses face many challenges when starting out, and they have a low margin for error, Terry Hicks, vice president and general manager of QuickBooks Online Ecosystem at Intuit, told eWEEK.
“The majority of small businesses start with less than $10,000, so every penny really does count,” he said. “One common mistake that was highlighted in our survey is that nearly a third—29 percent—of small-business owners use the same bank account for personal and business transactions, which makes it really hard to understand how money is flowing through a business.”
Other common mistakes the survey revealed were that only 42 percent of small-business owners get expert advice from an accountant, and only 41 percent use financial management software.
Hicks said the ubiquity of connected services like the cloud and mobile technology has dramatically changed the way small-business owners run and operate their business on a day-to-day basis.
For example, a product like QuickBooks Online makes it possible for small-business owners to access their financial data anytime, anywhere on their smartphone, and as a result, they can make smarter and more informed decisions in real time.
Social media is an important tool that can help small businesses establish an online presence and further build their brand, Hicks noted.
“Social media serves as a useful tool for garnering new customers and maintaining relationships with existing ones,” he said. “Like anything that you do with your small business, it is paramount to always be thoughtful about your small business and how you want it to be perceived, and to take that into account before posting anything.”
Intuit recently teamed up with Emergent Research to conduct a report titled “Small Business Success in the Cloud” that showed that nearly 80 percent of small businesses will be fully adapted to the cloud by the year 2020.
Small businesses will increasingly use cloud technology not only for efficiency gains, but also in more transformative ways that redefine the rules for achieving long-term success, the report projected.