If you are like me, you have your crystal ball out trying to figure out 2019. Heck, you are probably still trying to figure what happened in 2017--and now where to head this year. As business owners, we have to look ahead and plan for the next quarter, the next year, and even what trends will be in three years. Personally, I am trying to understand what kind of capital we need to push for at the end of 2018, based on what will happen in 2019. If the economy tanks, we want to ensure to have capital ahead of that. Ironically, if the economy does well, we also want to have capital to take advantage. Maybe there is my answer... Anyone know a good fortune teller?
New survey results presented Wednesday at Kauffman Foundation's 2018 State of Entrepreneurship address show that entrepreneurs are generally feeling upbeat about the prospects for business growth and their economic futures, despite a less optimistic outlook on the national economy as a whole. Putting this in normal-speak: Everyone is worried, but founders say, "We got this."
Entrepreneurs are Bullish
When asked about how they expect their businesses to perform this year, 88 percent of startups and 81 percent of older businesses are projecting they'll perform well, and 56 percent of startups and 40 percent of older businesses said they have become more profitable in the past year. For entrepreneurs, this is reason to celebrate and to be optimistic. Most founders I talk too stay away from the news, and instead listen to their customers to predict the future.
But, let's get specific. At Alice, we are particularly focused on helping women and minority entrepreneurs succeed, so when we dove deeper into the trends for those communities, the results were fascinating. Some of the key takeaways:
1. Women Entrepreneurs Aren't Quite as Optimistic
Compared with their male counterparts, women entrepreneurs reported less positive outlooks on the national economy and the economic climate for business. Among startups less than 5 years old, only 38 percent of women founders rated the national economy positively, compared to 51 percent of men. There is also a 10-point gap between men (69 percent) and women (59 percent) whether they give a positive rating when it comes to the current climate for businesses like theirs. Similarly, women business owners are significantly less satisfied with their profits than their male counterparts.
I personally think the lower optimism from women might stem from percentages going the wrong way; venture capital is down for women and loan rates are down. Even with all the vernacular in the news, #MeToo and #TimesUp, we have not turned the trajectory of funding.
2. Women Business Owners Feel the Least Supported by Government
In fact, 80 percent of women with startups don't feel that they had support from the government when they were starting their business. So, those pink hats are also symbolizing the need for more government support in business. Similarly, only 35 percent of startup women agree that the government cares about people like them. It is worth noting that around 90 percent of all of the entrepreneurs surveyed feel that the government should spend more time supporting businesses.
3. Entrepreneurs of Color Are Positive on Profits
Black and Hispanic entrepreneurs seem to be feeling pretty good about their profits. Among those surveyed, 82 percent of Hispanic and 76 percent of Black startup founders are satisfied with their profits, while around two-thirds of Black and Hispanic entrepreneurs expect to invest in their companies in the coming year. Interestingly, there were no gender or racial gaps in anticipated profit growth.
4. Tactical Business Steps Are Top Concerns
We get so many questions on Alice regarding taxes and insurance. I am not surprised at all that these are top concerns. I am, however, surprised about obtaining a business license being a problem. Talk to your local and federal elected officials about better ways to get this done! Kauffman Foundation asked entrepreneurs about their top concerns, and there was a common through line in the perceived challenges around tactical areas for starting and running a business. The top three concerns were:
· Obtaining a business license
· Insuring their business
· Paying business taxes
The good news here is that these concerns are somewhat addressed by knowledge sharing and resource connections that can help business owners understand the criteria and steps for each of these areas. At Alice, for example, we offer a collection of tax resources to help founders better understand business tax laws, how to prepare for tax season, and apps to get organized.
What does the crystal ball say?
Macro attitudes do not seem to have an impact on how men and women expect their businesses to perform this coming year with both genders reporting similar optimism. Leave it to an entrepreneur to jump over any barrier, even the national economy. But we are reminded to pay attention to our women counterparts and draw to them more support. I encourage everyone to dig into Kauffman's State of Entrepreneurship report. You can check it out here. As entrepreneurs, we tend to be optimists, and we also need to pay attention to economic trends and plan ahead. But I do agree, "We got this."