The 2017 DNA of an Entrepreneur Report
Each year Hiscox releases its annual DNA of an Entrepreneur Report. This year marks the report’s 9th edition, and we’re pleased to announce that the study reveals a confident and promising growth trend among US small businesses. In fact, 72% of respondents reporting increased top-line revenue in the past year – the highest among all of the countries we surveyed.
View the entire 2017 DNA of an Entrepreneur Study here.
Highlights from this year’s report include:
Millennials Hitting Their Stride
This year’s findings show younger entrepreneurs are finding success and confidence as business owners. In fact, 56 percent of respondents under age 30 said their personal financial situation is better now than it was a year ago; 59 percent of respondents ages 30-39 also agreed with this statement. These age groups are also the most optimistic about the future – 73 percent of respondents under age 30 and 86 percent of their counterparts ages 30-39 shared positive sentiments about the future of their business over the next 12 months.
Who Feels Better Off? Depends on Your Gender and Age
Asked about their personal financial situation, more than half of US men running small businesses (51%) say they feel better off than a year ago. The figure for women is just 40 percent. There is also a pronounced age bias in the results. Nearly three out of five (58%) of those under 40 feel better off. At the over-50 level, the figure falls to 35 percent.
Attitudes Toward Government Improving
US small business owners are starting to change their attitude when it comes to government. In this year’s report, 46 percent of respondents said government policies were supportive of entrepreneurs, an increase from 34 percent in 2016. Interestingly, there was also an increase in the number of respondents saying political instability is having an impact on their business (31% to 36%).
Serial Entrepreneurs Driving Innovation
Despite already juggling the many facets of running one business, 26 percent of US small business owners currently operate more than one small business. They are a dynamic group, as 36 percent of these entrepreneurs are planning to develop a new product in the year ahead.
Overdependence on One Customer is a Concern
For the first time, we asked firms to tell us what proportion of their revenue was accounted for by their leading customer. Seventeen percent of small businesses are dependent on their largest customer for half or more of their revenue. The average figure for US firms is approximately one-quarter (27%) of their revenue. This is a vulnerability many small businesses live with every day.
Embracing Non-Traditional Sources of Financing
Small business owners in the US are actively embracing non-traditional sources of financing, finding alternatives to bank financing. For example:
- 23 percent have borrowed funds using a credit card;
- 14 percent have turned to family and friends;
- 11 percent have brought in equity investors;
- 10 percent have used crowdsourcing; and
- 9 percent have raised money by remortgaging their house.
Cyber-attacks Cause Serious Loss
Technology has also introduced new challenges for small businesses, with 16 percent of respondents reporting that they have suffered a cyber-attack. Of those respondents, 61 percent cited the attack resulted in a serious loss to the company. Despite the damage a cyber-attack can do to a small business, only 10 percent of US small businesses reported having insurance that covers cyber risks, such as cyber-attacks or data breaches/loss.