One of the great things about my job at Small Business Television, SBTV.com, is meeting inspiring and interesting entrepreneurs. The small business owners who are the innovators, the risk-takers, the people working to improve the quality of life not only for themselves, their employees, but communities too. It seems this positive outlook lives on during this time of economic turbulence and uncertainty in our economy. A new survey reveals entrepreneurs’ attitudes are positive about the long term future of not only their enterprises, but the U.S. economy too!
The new survey of Ernst & Young LLP Entrepreneur of The Year finalists and winners explores the attitudes of entrepreneurs toward top-of-mind issues, including the economy, government and climate change. The majority of the 116 respondents indicated that the strength of the economy was not the deciding factor in determining when to start their companies. The Entrepreneur of The Year program is now in its 22nd year, and its average winners have $350 million or more in yearly revenues, 20% annual growth, and over 1,000 employees. Despite worries that the US economy is weaker than most people believe (50%), entrepreneurs participating in the survey indicated that they think the US economy will continue to be the world’s strongest (54%). The majority (61%) founded their companies in a healthier economic time, but overwhelmingly (92%) stated they would have founded their company regardless of the state of the economy. Although entrepreneurs are active in the political sphere, those participating in the survey believe the government could do more to support new businesses. Respondents overwhelmingly (72%) stated that the government doesn’t do enough to support entrepreneurs; 73% are personally involved in public policy issues and 64% have petitioned a politician for policy change. More than half (53%) of entrepreneurs surveyed think the most important contribution they make to the US economy is to create jobs. Additionally, almost one-third of those surveyed (28%) believe the most significant contribution entrepreneurs can make is to promote innovation and improve quality of life for their customers. Those surveyed contribute to charity; 44% donated $50,000 or more in the past year.
“The American economy is built on the backs of entrepreneurs,” said Larry Haynes, Americas Director, Ernst & Young LLP Entrepreneur of The Year program. “This survey illustrates the contribution entrepreneurs make by creating jobs, improving local communities and bolstering the larger US economy. They are ready to make adjustments and continue striving for growth and success; in fact, nearly three-quarters of entrepreneurs we surveyed believe they will innovate and find opportunities in the current economy.”
Coping with economic challenges entrepreneurs have already taken steps to adjust to the economic downturn. In the last 24 months, 44% of survey participants reduced spending, 29% reduced their workforce and 29% refinanced debt. On a positive note, 32% sought acquisitions and 67% said they increased the number of employees by an average of 14% in the past year. Respondents are particularly concerned about the cost of health care and energy; 50% and 49%, respectively, reported those issues as having the most significant negative effect on their companies. Health care costs for respondents’ companies, for example, rose an average of 15.49% per company last year. When it comes to seeking additional funding, entrepreneurs participating in the survey indicated that they are looking towards private equity (73%). Another 12% would consider a private wealth fund infusion. Twenty-seven percent postponed an IPO or another strategic transaction in the last 24 months.
Ernst & Young’s Entrepreneur of The Year awards program celebrates its 22nd anniversary this year and the award ceremonies are coming up. Awards are given to entrepreneurs who demonstrate extraordinary success in the areas of innovation, financial performance and personal commitment to their businesses and communities. This year’s awards take place on November 15th in Palm Springs, California, as the culminating event of the Ernst & Young Strategic Growth Forum, the nation’s most prestigious gathering of high-growth, market-leading companies. As the first and only truly global award of its kind, Ernst & Young Entrepreneur of The Year celebrates those who are building and leading successful, growing and dynamic businesses, recognizing them through regional, national and global awards programs in more than 135 cities in 50 countries.