Three in Five New Microbusinesses Use Personal Savings to Stay Afloat, Sam’s Club Survey Finds
July 28 2014 - 11:00AM
Business Wire
- Less than three percent use grants,
government loans or crowd-funding
- Anxiety over owner’s ability to save
for retirement
- More than half believe U.S. economy
is worsening
As new and alternative funding sources target small businesses
and increasingly penetrate the U.S. market, less than three percent
of U.S. microbusiness owners report using government loans (2.7%),
small business loans (2.4%) or crowd-funding (1.9%) to fund their
business, according to the Sam’s Club/Gallup Microbusiness
Tracker.
More than 60 percent of new microbusiness owners rely on
non-retirement, personal savings as the lead source of funding for
their businesses, four in ten owners (43.4%) use credit cards and
one in five (22%) use money from friends and family. The quarterly
survey of 1,004 U.S. firms with five or fewer workers also found
U.S. microbusinesses started in the past year are 30 percent more
likely to use personal savings (79.1%) to maintain their business
than mature businesses (50.5%).
In the most recent Sam’s Club/Gallup Microbusiness
Tracker, conducted May 8-26, 2014, microbusiness owners
reported that in the past 12 months, two in five microbusiness
owners (40.4%) have had to dip into personal or retirement savings
to improve their bottom line, while 42 percent have increased the
price of their goods and services.
Confidence in Business, but Not the Economy
The Sam’s Club/Gallup Microbusiness Tracker explores the
emotional and economic concerns of the country’s smallest
businesses that employ one out of every ten Americans. The survey
reveals that more than half (54.9%) of owners foresee the economy
to worsen, yet 70 percent are energized by their work and six in
ten (65.2%) are confident they have the talent to grow their
company in the future. Confidence is also reflected in their
perception of the future and their impact on the community.
Download the Sam’s Club/Gallup Microbusiness Tracker
Report for further insights into microbusiness owners’ views on
financing, operations and the future in new (0-3 years) versus
mature (10+ years) segments. As a group, 71 percent are confident
in their company’s future and 67 percent feel they have a positive
impact on their community.
“Despite concerns over worsening economic conditions, U.S.
microbusiness owners are confident in nearly every dimension of
work and life. This vital segment of the U.S. economy is passionate
about their choice to pursue a small business venture and
unwavering in their commitment to serving consumers with an intense
focus on quality no matter how many other factors or challenges
they may face,” said Rosalind Brewer, president and CEO of Sam’s
Club.
High Job Satisfaction Driving Vacation Time
During the country’s peak season for travel and downtime, U.S.
microbusiness owners emphatically responded they are taking time
off, with 83 percent planning a vacation this year. East Coast
residents (25%) were most likely to opt out of a vacation. In
contrast, only 12 percent of Midwestern microbusiness owners and 15
percent of Southern microbusiness owners said they are skipping
vacations.
Road trips within 500 miles of home are most microbusiness
owners’ vacation of choice (46%), providing possibilities of
staying connected to business through wireless technology. With a
considerable 49 percent of microbusiness owners strongly agreeing
they have the technology they need to run the key functions of
their companies, there is increased ability to conduct necessary
tasks while taking time to recharge.
While road trips are by far the most popular vacation type for
this group, 19 percent plan to fly to a U.S. destination for time
away. Less popular vacations among microbusiness owners include
flying outside the country (14%) or taking a cruise (3%).
Planning for the Future: Retirement Savings and Health
Benefits
One of the few areas of emerging anxiety across the board for
microbusiness owners is a concern about long-term investments with
43 percent indicating they are worried about retirement.
The survey revealed other surprising findings about putting
money away for the future:
- The more you make the more you worry.
Nearly half of microbusiness owners generating $50,000 or more in
revenue (44%) are anxious about saving for retirement, compared to
those making less than $10,000 (42%).
- Having a nest egg weighs more heavily
on female microbusiness owners: 47 percent of women, compared to 41
percent of men, are concerned about retirement savings.
- East Coasters are the most nervous
about the saving for the future (49%) while Midwest microbusiness
owners are the least apprehensive (39%).
As concern for retirement savings is consistent with past
reporting, concern for healthcare benefits has decreased by more
than 10 percent. Only a third of U.S. microbusiness owners today
are concerned about worker healthcare benefits today (36%) compared
to Sam’s Club/Gallup Microbusiness Tracker reporting from December
2013 (48%) and April 2014 (41%).
For further information please view Gallup’s article Almost One
in Five Microbusiness Owners Took No Vacation in the Past Year and
download the Sam’s Club/Gallup Microbusiness Tracker July 2014
Report at SamsClub.com/newsroom.
About The Sam’s Club/Gallup Microbusiness Tracker
The Sam’s Club/Gallup Microbusiness Tracker is a nationally
representative survey that regularly reports on U.S. businesses
with five or fewer workers, a key driver of U.S. economic growth.
The tracker provides valuable insight into the mood and mind of
microbusiness owners for decision makers and influencers in
government and commerce by highlighting the unique concerns and
challenges of microbusinesses along their path from startup to
maturity. To learn more about the Sam’s Club/Gallup Microbusiness
Tracker, visit SamsClub.com/Newsroom or Gallup.com.
About Gallup
Gallup delivers forward-thinking research, analytics, and advice
to help leaders solve their most pressing problems. Combining more
than 75 years of experience with its global reach, Gallup knows
more about the attitudes and behaviors of the world's constituents,
employees, and customers than any other organization.
About Sam’s Club
Sam’s Club®, a division of Wal-Mart Stores, Inc. (NYSE: WMT), is
a leading membership warehouse club offering superior products,
savings and services to millions of members in 640 clubs in the
U.S. and Puerto Rico. To learn more about Sam’s Club, visit
the Sam’s Club Newsroom, shop at SamsClub.com, and
interact with Sam’s Club
on Twitter and Facebook.
Sam’s Club Media RelationsCarrie Foster Moore,
1-800-331-0085SamsClub.com/newsroom
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