Community survey 2016-17
Soloist, independent professional, business owner, freelancer, lifestyle entrepreneur, contractor… whatever moniker you choose, the stampede to soloism continues!
The largest survey of its kind, running since 2008, ‘Understanding micro business’ from Flying Solo provides valuable insights for Government, industry, the media and of course our micro business community!
It also gives this community the authoritative voice it deserves and helps determine the tools and resources soloists need to create a business and life they love.
A huge thanks to the 1,000+ Flying Solo community members who so generously gave their time to complete this survey. We love your work!
This report provides a clear snapshot of Australia’s largest business sector exploring challenges and opportunities; demographics; technology; networking; outsourcing; marketing; exit plans and much more.
In this our fourth survey, we are pleased to report that a resounding 85% of soloists remain happy in their work, with lifestyle factors, such as flexibility and autonomy, still valued as the greatest benefits of going it alone.
And, while money is not their primary motivation, our community enjoy incomes higher than Australian averages.
Let's look more closely at who we are
What's news? A look at the findings behind the data..
Your own business: It’s a lifestyle thing!
Sure, the income can be good - with business owners earning well above ABS averages - but it’s not about the money. Lifestyle factors remain hugely appealing to our community, with flexibility, control and the ability to work from home valued highest. Evidence of businesses built to support a lifestyle is shown in the data, where 49% of the sample have kids at home, 65% work from home, 71% love their workspace. Happiness levels are also consistently high, pegged at 85% this time and 86% in 2010, and when it comes to enthusiasm, 61% report being more upbeat about their business than a year ago.
While the average respondent reports being much busier since they embarked upon their business journey, they also report being more self-aware, happy, positive, fulfilled and confident. It’s no wonder most business owners don’t have an exit plan!
NO EXIT! Business owners in it for the long-haul
While the tech startup scene promotes speed, change and build-to-sell, Australia’s micro business community is settled in for the long haul. 53% have operated for 3+ years, and a healthy 40% for 5+ years. 83% describe themselves as ‘stayers’ rather than fast-growth entrepreneurs (6%). Furthermore, 72% do not have an exit strategy in place and 54% don’t think they could work for anyone else.
Money’s not too tight to mention
The idea of the struggling small business owner is a myth for most of the respondents. The average annual personal income of the sample compared favourably to national ABS averages ($69k compared to $59k). Average household incomes for families were even more favourable at $114k, compared to the national ABS average of $93k. Additionally, 46% of the sample report a household income greater than $100k.
Even so, many people would like to be generating more income, with only 26% feeling satisfied. There is evidence that persisting is worthwhile, with the satisfaction rate increasing to 31% for businesses operating for 5+ years.
On average, businesses contribute 46% of the household income, which makes them essential to balancing the budgets, as opposed to just a side income.
Aussie small businesses keep it local
Despite all the talk about the global economy and borderless commerce, 81% of micro business owners sell primarily within Australia - in fact 59% sell mainly within their own state. The majority (57%) also source all their products locally. And, for those who use outsourcing, there is a strong preference for using local service providers (61%).
Small is beautiful for these businesses
Consistent with past waves of the study, almost half (47%) of soloists plan to stay small and profitable, with a further 23% aiming to grow a small amount through hiring or outsourcing. Just 24% have aspirations to grow a much larger business. The myth that all soloists want to build an empire is out-dated. Small is a choice that can enable lifestyle benefits like flexibility, freedom, autonomy and balance.
Facebook, LinkedIn rated best for small business
More than double Twitter (19%) and Google+ (18%), Facebook (50%) and LinkedIn (41%) were ranked as the most effective social media tool for business owners. With forums like Flying Solo’s enjoying active participation, it is not surprising to see that these also ranked strongly, coming in third place at 29%.
Online networking is killing face-to-face
While business owners still like to get together in small informal groups, face-to-face networking is in decline. Today, 36% report attending monthly networking events compared to 56% in 2010. This change coincides with the rise and rise of social media where many now go to gain a sense of connection and community.
Working all over the shop
The rise of cloud technology usage, mobile devices and wireless internet has led to an increase in working on-the-go. While 65% of the sample work from home, this number has declined since previous surveys, balanced by an increase in other work locations such as cafés, clients’ offices, public transport, libraries, outdoors and school pickup zones.
Report of small business deaths greatly exaggerated!
While scary stats of small business failure are thrown around wildly, 53% of the sample have operated for 3+ years, and a healthy 40% for 5+ years. While 30% of respondents reported having had a business that is no longer running, a mere 13% described this as a ‘failure’. The most common reason identified for cessation was that the business had run its course (27%) or never got off the ground (24%). Other reasons given for business closure were related to individual circumstances such as an employment offer, sale, change of direction and so on. In other words, it's the same process that employees take during a successful career transition!
Micro businesses miss marketing opportunities
Even though ‘finding clients’ still presents the biggest challenge for 44% of businesses, it is surprising to see that 44% of businesses also report investing little or no time in marketing activities to address the issue. At the other end of the spectrum, 25% of businesses devote a day or more a week to marketing. Reflecting the benefits of an established client base, 17% of those who’ve been in business longer than five years didn’t spend any time on marketing, with 76% of that group relying on repeat business.
Sleeping with the enemy
Even faced with reports of stress, distraction and overwhelm that comes from running a business in an always-connected world, 62% of business owners sleep with their phone by their bed. Plus, the thought of losing a smartphone is now just as distressing as losing a wallet or purse! Furthermore, 85% admit that checking in online is one if the first items in the morning routine.
Overwhelm and outsourcing on the up
The ‘do-it-all' culture of small business owners is evident with overwhelm still one of the top challenges. However, outsourcing is fast gathering speed with 80% of this survey’s respondents now outsourcing at least one business task, up from 27% in 2012. While preference for using local providers remains high at 61%, there is evidence that the global economy is being embraced, with 39% of those who outsource doing so offshore, compared with just 20% in 2012.
This growth clearly shows that soloism is maturing. Business owners can finally shake off the ‘do it all’ stereotype as they increasingly identify the best use of their own time, and outsource the non-essential. This is also an encouraging trend as it demonstrates a willingness to use each others' services.
Small business turns its back on traditional media
While not known as big advertising spenders, business owners are focusing their limited time and resources on digital channels to generate new business. Where over 60% of business owners are favouring website and social networking to drum up sales, less than 8% report using printed channels like ads in traditional media or letterbox drops.
Word-of-mouth reigns supreme
For the third survey running, traditional word-of-mouth continues to be the most effective way to generate new business. Activity on social media - which could be framed as digital word of mouth - is also an increasingly effective channel for 61% of the sample, a figure that has more than doubled in recent years. Repeat business remains strong, becoming more important the longer you’ve been in business.
Co-working not the solution for connection
While the concept of co-working spaces - operating in a shared space with others - has little or no appeal for 72% of the audience, 68% of people do like a mix of working alone and with others. 65% work from home and 71% love their workspace, however they also enjoy the opportunity to work elsewhere. Along with the usual suspects of cafés and other offices, the survey revealed diverse work locations including public transport, libraries, outdoors and school pick up zones!
To discuss any aspects of this research or the Flying Solo community, please get in touch.
This survey was conducted for Flying Solo by Decibel Research.