Hiscox's DNA of an Entrepreneur study shows U.S. as global small business leader
U.S. respondents top 7th annual survey for growth in revenue, profits and customers over the past year
- Sales are up – 74% of U.S. small business owners increased their customer base and three out of five firms say their order book is growing.
- Optimism is on the rise – 69% of small business owners are optimistic about the year ahead compared to just 51% in 2014.
- Innovation in the forecast – 39% of small business owners introduced a new product in the past twelve months and 50% are planning to do so in the year ahead.
- Need a vacation – U.S. small business owners take barely half the average amount of vacation days as rest of world and 1 in 5 American entrepreneurs take zero time off.
New York, September 8, 2015 – Hiscox, a global specialist insurer that provides U.S. small businesses with the simplest way to purchase customized business insurance directly online or over the phone, announced today the U.S. findings of their seventh annual DNA of an Entrepreneur report. Hiscox surveyed over 1,000 small and medium-sized U.S. business owners about the financial pressures, stresses, opportunities and challenges currently faced by entrepreneurs.This year’s findings reveal that when compared to the global average, American small businesses lead the world in revenue (72% vs. 65%), profit (68% vs. 61%), and customers (74% vs. 71%).
“Last year small business owners showed encouraging signs that they had weathered the storm and were seeing signs of recovery,” said Ben Walter, CEO of Hiscox USA. “This year U.S. small business owners have demonstrated a genuine sense of confidence in the year ahead. We’re excited to watch this trend continue and do everything we can to support our small business customers as they innovate and grow.”
Riding the Wave
Gross domestic product (GDP) growth was above expectations at 3.7% for the 2nd quarter of 2015 and US small business are riding this wave of growth.
- Almost half (45%) of American small business owners are feeling better off than they did a year ago.
- The majority (72%) of respondents experienced growth in revenue in 2015 compared to 50% in 2014.
- Three-in-five firms (60%) say their order book is growing.
The gender gap takes a turn
This year, American women outnumbered men 53% to 47% in the U.S. respondent pool. This is a sharp contrast to the picture globally where women make up just 38% of respondents. These businesses are here to stay, the majority of women (72%) in the U.S. are not planning to exit their business within the next five years.
Women entrepreneurs are trending increasingly optimistic year-over-year, with optimism growing from 56% in 2013, to 64% in 2014 and 72% in 2015. This positive outlook comes with good reason, as American women are reporting equal, or in many cases, more growth than their male counterparts.
- New Customers – 79% of women experienced new customer growth compared to only 69% of men.
- Revenue – 72% of American women reported growth in revenue as compared to 71% of men.
- Profit – Both men and women (68%) reported a growth in profit over the past 12 months.
Funding still a challenge
Alternate forms of financing still dominate, with banks continuing to be very conservative in loans to small businesses.
- Only 13% of those polled borrowed money from a bank in the past year.
- One-in-five small business owners (21%) are funding their business by swiping their credit card and 11% are thinking about doing so in the year ahead.
- 11% borrowed money from friends and family in the past year.
More hiring and innovation
Nearly a quarter (23%) of small business owners are likely to increase investment in their business in the coming year. A quarter of small business owners increased staffing levels in the past year and 39% developed or introduced a new product. Another 50% are planning to roll out a new product in the year ahead.
Small business owners are also continuing to use social media for internal and external communications. The top social media channels for small businesses are Facebook (56%), LinkedIn (49%) and Amazon (40%). Despite their adoption of social media, 22% report hacking and cybercrime as a key concern, and something they are not insured against.
A focus on courage and hard work
Courage and hard work are paramount to small business success; in fact, U.S. respondents cite hard work as one of the key attributes of managing a small business. According to the Hiscox American Courage Index, small business owners are 17% more courageous than the general population and twice as likely to feel very confident about the strength of the economy over the next six months.
Hiscox specializes in insurance for small business owners, such as professional liability (errors and omissions insurance) and commercial general liability customized for a range of fields including IT, consulting, marketing, photography, real estate, beauty and health. Hiscox offers business insurance quotes direct and online in real-time along with other liability insurance products, such as business owner’s policies. Since launching their groundbreaking online service in the US in 2010, Hiscox has received an average customer service rating of 4.8 out of 5 and 96% of those surveyed would recommend Hiscox (Feefo customer surveys).
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Sample and methodology
This study was conducted for specialist insurer Hiscox by Research Now. The sample was drawn from online panels contacted between 22th May and 15th June 2015. The findings are based on responses from 4,140 owners or partners in businesses with up to 50 employees (1,024 respondents from the UK, 1027 from the US, 525 from France, 514 from Germany, 526 from the Netherlands and 524 from Spain).
About Hiscox Small Business Insurance
Hiscox, the international specialist insurer, is headquartered in Bermuda and listed on the London Stock Exchange UK:HSX +0.22% . Hiscox is the first company in the US to offer insurance for small businesses direct, online, and in real-time. We provide professional liability, general liability and business owner's insurance, underwritten by Chicago-based Hiscox Insurance Company Inc., which is rated 'A' (Excellent) by A.M. Best Company. Additional information can be found on the Why Choose Hiscox? page. Coverages are subject to underwriting and may not be available in all states.
Hiscox also provides professional liability, property and specialty insurance to US businesses through US-based brokers. This communication does not constitute a solicitation of business by Hiscox's syndicates at Lloyd's, London.