The Megaphone on Main Street: Small Business Jobs Report

1. The Megaphone on Main Street: Small Business Jobs Report

2. introducing score 11 million entrepreneurs served since 1964! Mission: Foster vibrant small business communities through mentoring and education. Facts • Resource partner of the U.S. Small Business Administration • 10,000+ volunteers in 300 chapters nationwide • In 2017: 54,506 small businesses started, creating 61,534 non-owner jobs.

3. Who Does SCORE Help? Firms in Business for a Year or More Startups Pre- Startups Growth Opening Research & Planning

4. Mentoring Free. Personalized. Confidential. Expert Advice For the Life of Your Business Benefits of Mentoring: • SCORE mentors provide the specific resources you need through personalized, 1-on-1 mentoring. • Avoid timely and costly mistakes by learning from someone who’s “been there, done that”. • Feel confident knowing you have an experienced resource available for simple questions or more complicated strategy development. • SCORE helps businesses start and succeed. In 2014 we helped create over 56,000 new businesses. The next success story can be yours.

5. Online Resources Templates. Tips. Blogs. Workshops. Tools for Business Success Available 24/7 Get access to thousands of templates & tools, blog posts, and LIVE (and archived) webinars/workshops to help you start and grow your business. • Templates & Tools - Articles, assessments, outlines, templates, and other resources that you can use to learn and implement new strategies • SCORE LIVE Webinars - Live ,1-hour presentations by mentors and partners on a variety of small business topics and trends • Online Workshop – A business training module archived on score.org • SCORE Blogs - Business experts in a number of industries share information on emerging trends and topics facing today’s small business owner • SCORE Newsletters – Visit www.score.org/connect to get the latest business information, tips and resources delivered to your inbox

6. Why SCORE Works You Don’t Have to Go It Alone Mentoringprovides improved chances for startup and success through one-on-one business coaching. Workshopsprovide training on critical topics in an environment where you can learn from experts and like-minded entrepreneurs. Online Resources can be your playbook to provide step-by-step outlines for small business strategies.

7. AGENDA Small Businesses and Employment The Impact of the ‘Gig’ Economy Small Business Owner Sentiments Are Overwhelmingly Positive

8. Megaphone of Main Street Data Reports • Data from SCORE’s client engagement surveys (20,000 responses) and topical surveys • 329,421,090 TPA; 1,682 media mentions (3 reports)

10. Survey Methodology & Respondent Demographics Methodology: • Online survey administered to SCORE small business owner clients between Sept. 21 and Oct. 9, 2017.

11. Respondent Demographics 1736 business owner respondents, the majority being micro-businesses.

12. Respondent Demographics 77% of respondents had annual sales receipts under $500,000.

13. Respondent Demographics

14. Respondent Demographics

15. Respondent Demographics

16. Respondent Demographics

17. Respondent Demographics

18. PART I: Small Businesses and Employment Hiring is Becoming More Challenging: • 55.5% of small business owners said it was more difficult to fill their hiring needs in the past six months than it had been previously.

19. PART I: Small Businesses and Employment • 27.3% of small business owners had job openings in the past six months that they could not fill.

20. PART I: Small Businesses and Employment • 51.3% of business owners cited an inability to find qualified applicants as their greatest hiring challenge.

21. PART I: Small Businesses and Employment Hiring is Becoming More Challenging: • “Quality employees are hard to find.” • “I could hire a lot of reasonably qualified people, but I’m not even making minimum wage myself. How can I possibly hire someone and pay them three times what I make without any benefits?” • “As far as employees are concerned, turnover has been my biggest issue. I can’t afford to pay what large companies pay, so I offer work from home positions and they can complete the work when they have time to provide some benefits.

22. PART I: Small Businesses and Employment Personal Referrals Help Find Qualified Workers • By far, business owners reported having the greatest success hiring through personal referrals, with 19% relying on personal referrals from workers and 17% relying on referrals from other business owners during the hiring process. • 41%-53% of those business owners who used personal referrals reported successfully hiring someone.

23. PART II: The Impact of the “Gig” Economy What do we mean by ”gig economy”? • Small jobs (gigs) to make $ as needed • Short-term projects • Never heard of it • Millennial focused • No long-term commitment • Fractional services • Self-employment • Upwork, Fiverr • Unskilled day jobs • Highly technical, specialized skills

24. PART II: The Impact of the “Gig” Economy Definition for today: • US Census “small, unincorporated businesses, which may or may not be the owner’s principal source of income” • a high degree of autonomy • payment by task, assignment, or sales • Often a short-term relationship between worker and client

25. 20 – 30% of the working-age population in the US and the EU-15, (162m) engage in independent work

26. PART II: The Impact of the “Gig” Economy The Gig Economy Is on the Rise

27. Gig workers can be found in all industries:

28. How Did We Get Here? • Technological change – it is easy and cheaper to start a business. • Structural shifts in the economy: Since 2000 the economy is not generating enough jobs for new workers entering the US workforce. • Improved networks and interest in steering personal and professional lives.

29. PART II: The Impact of the “Gig” Economy The Gig Economy Employment Is on the Rise • Business owners reported a 37% increase in hiring gig workers over the past six months, compared to increases of 13% for full-time employees, 22% for part-time employees, and 12% for part-time independent contractors. • 19.8% of businesses surveyed reported replacing employees (of any type) with contractors over the past six months.

30. PART II: The Impact of the “Gig” Economy The Gig Economy Is on the Rise • 47% of non-employers/solopreneurs reported hiring other people part-time to help run the business, for an average of 3.2 workers, including the owner. • Why this matters: These businesses make up 80% of the 30 million American small businesses currently in existence.

31. PART II: The Impact of the “Gig” Economy Top reasons to hire contractors: specialized knowledge (50.8%) and temporary needs (41%).

32. PART II: The Impact of the “Gig” Economy Top reasons to hire an employee: consistency of work (57%) and commitment to the company, vision and brand (53%).

33. PART II: The Impact of the “Gig” Economy Top business functions for contractors: technology (42%), accounting (41%) and marketing (38%):

34. PART II: The Impact of the “Gig” Economy • “ I am actually experimenting with my business in that I am trying to only use contractors/ freelancers. So far I haven’t had any issues with this approach.” • “ For years I was in a Catch-22 situation: I couldn’t grow without help, and without growth I couldn’t afford help. An independent contractor was the perfect solution.” • “ If a contractor fails, you can cut them loose. If an employee fails, you’re stuck with the costs of training, the risks of training locally (competition), salaries, infrastructure and more. I need assistance, but I will not go the employee route again. “

35. PART III: Small Business Owner Sentiments Are Overwhelmingly Positive 69% of all small business owners are optimistic about their growth over the next six months.

36. PART III: Small Business Owner Sentiments Are Overwhelmingly Positive Future Concerns • As a whole business owners were most concerned about policies that favor large businesses negatively impacting their growth outlook (48%), although fewer millennials worried about this (26%).

37. PART III: Small Business Owner Sentiments Are Overwhelmingly Positive • “ Export financing for buyers has not been developed to match the demand for small manufacturers. I have been trying to get financing for my buyers overseas now for 25 years.” • “ It is very, very hard to start and maintain a small business. There is no access to investment capital.” “Healthcare is a huge issue. It… is daunting.” • “I don’t want to be in the health insurance business; I want to focus on running my business.” • “Major simplification of tax codes, federal, state and sales, would be a big help.”

38. Questions? Contact me: media@score.org Full-length reports and 3 infographics available at score.org. (Search “Megaphone”).