The face of the small business owner is changing, and not only because millennials are coming into their entrepreneurial age. New data from the Bureau of Labor Statistics published last week offered the U.S. a look at just how large the gig economy has become, with more professionals opting to be their own boss – at least part-time.
According to the Bureau, 16.5 million individuals have “contingent” or “alternative work arrangements,” reports in The Guardian said. Last month, nearly 3.8 percent of the U.S. working population held contingent jobs in the country, while an additional 10.6 million operated as independent contractors, temporary contractors or on-call workers.
The role of the gig economy is undoubtedly changing worker demographics, but reports noted that it’s not always clear exactly what defines a “gig” – or how these professionals even define themselves.
“I’m kind of like a small business owner, but Uber takes a 30 percent cut,” said one New York Uber driver in an interview with The Guardian.
As the small business identity continues to evolve, the latest research suggests that entrepreneurs face no shortage of challenges – though they remain adamant about persevering through them. PYMNTS breaks down the data highlights below.
Fifty-three percent of SMBs said employee health insurance costs are top-of-mind, closely followed by tax reform, according to SmartBiz Loans’ latest survey. Researchers found that more than a third of SMB owners said they have already been forced to modify their businesses as a result of tax law changes.
Forty-nine percent of small businesses said finding and hiring qualified employees is their top concern, with 90 percent noting that they value experience over education in new hires. However, nearly a third noted that they would be willing to hire candidates with a lack of experience and invest in training them, according to SmartBiz Loans’ survey. A tenth of entrepreneurs told researchers that they are actively investing in hiring new staff and procuring new equipment.
Fifty-one percent of business owners said they are offering more flexible work arrangements in order to entice new talent to their companies, according to SmartBiz Loans. The finding could suggest that the rise in the gig economy and the appeal of flexible work arrangements has put pressure on owners of traditional businesses to offer competitive experiences to their own workers. A third told surveyors that they are also increasing wages in order to maintain their appeal with new hires.
Fifty-seven percent of SMBs surveyed are positive about business growth this year, SmartBiz Loans found, a statistic that highlights entrepreneurs’ continued optimism and success despite challenges linked to hiring, legislation and costs.
Seventy-two percent of entrepreneurs would still use accountants even if they adopted an AI accounting tool, according to new data from Xero. The accounting company’s report suggests that, despite the inroads made by artificial intelligence and automation technology in SMB accounting, the tool isn’t replacing the job of the accountant. Instead, researchers noted, it appears to be supplementing the accountant’s role as business owners continue to rely on human experts to help grow their businesses.
Sixty-five percent of SMBs consider their accountants’ advice verybeneficial, found Xero, again highlighting the continued importance of small business accountants in helping their clients grow. According to the report, accountants surpass friends, family, online communities, lawyers, financial advisors and consultants in terms of how much entrepreneurs trust and use these resources.
Eighty-six percent of SMBs say paper checks are still their top payment method, according to Bill.com research. But more than a quarter agreed that online payments are their top choice, signaling a shift in how entrepreneurs choose to pay their bills and invoices. The rising challenges of paper checks are increasingly felt by the small business community: According to Bill.com’s report, time spent, human error and payment data tracking are the top hurdles entrepreneurs struggle with when they make paper-based payments.