Turning the corner… but still a way to go
This is the sixth edition of the Hiscox DNA of an Entrepreneur study. The findings of this study are based on responses from 3,500 owners or partners in businesses with fewer than 50 employees.
A demonstration of true grit
Small businesses matter. Studies in the US and UK have shown that the small business sector is responsible for creating four out of every five new jobs and more than half of all commercial innovations. Their impact on local economies can be doubly important. Gauging the health of small businesses, and understanding the key issues they face, are therefore vital endeavours for policy-makers everywhere.
In this, our sixth international ‘DNA of an Entrepreneur’ study of small businesses, there are heartening signs that small businesses have weathered the storm of recent years and are looking to the future with increasing confidence. The study spans six countries and the results are far from even. But, overall, there are renewed signs of growth, while optimism levels have rebounded. The resilience and perseverance apparent in previous studies are paying off.
Nowhere is that better demonstrated than in the performance of small businesses set up during the recession. Our study reveals the dogged entrepreneurs behind these businesses are more likely than others to have increased revenues, launched new products or services and hired new staff in the past year. They are also more likely to say the economic
environment has made them more determined to succeed. This is true grit.
Our study also reveals some of the extra challenges the very smallest of firms face. It is the bigger firms in our sample – those with £5 million or more turnover – that are the most bullish about their prospects. Perhaps unsurprisingly, they are also finding it much easier to get funding for new products or services. The smallest of firms plainly struggle to get that support. There is an important message here for policy-makers.
As in past years, we sought to tease out information on the lifestyle and attitudes of our respondents. This not only contributes to a fuller understanding of what makes entrepreneurs tick but helps us, as a small business insurer working with over 227,000 small businesses in the six countries featured in this study, identify their needs and serve them better.
Small businesses have had much to contend with but this study suggests there are better times ahead. As in past years, we hope it will serve as a valuable data source for Governments, advisers, academics and others with the task of analysing and interpreting the wellbeing of small businesses and nurturing what is a vital sector of the world economy.
Chief Executive Officer, Hiscox