What Do Small Business Owners Need in 2021?Impact Reports•Sep 15, 2021• 2 min read
As the largest community of underrepresented entrepreneurs in the United States, Hello Alice regularly collects data on who small business owners are and what they need to succeed. Titled “A Study of 400,000 Small Business Owners in America: A Closer Look at the Engine Powering the U.S. Economy,” our latest research provides a comprehensive description of the nearly half a million owners on our platform as we enter a new phase of pandemic recovery.
Our owners strongly reflect New Majority demographics. Nearly two-thirds identify as female (63%) and/or BIPOC (68%). There is also significant representation among people with disabilities (9%), the military connected (17%), and the LGBTQ+ community (8%).
Key takeaways from this report include:
- Entrepreneurs create jobs. Nearly three-quarters of small businesses have at least two employees. Crucially, these diverse business owners hire diverse employees; almost three-quarters of owners say their teams are primarily composed (>50%) of staff members who identify under New Majority demographics.
- Owners are facing new challenges. Growing a business, marketing, and hiring a team have emerged as common difficulties for business owners in 2021. At the same time, owners consistently rank access to funding as their number one challenge for small business owners across demographics, with higher rates among Black and multiracial owners.
- Owners are shifting their focus. As small businesses recover from the initial shock of the pandemic, they are focusing on building a brand, acquiring customers, raising capital, and managing finances. However, business priorities vary across demographics. For example, Black owners over-index in the need to raise capital, while Asian owners over-index on managing finances.
- In general, owners are optimistic. The vast majority of owners predict 2021 will be better for business than 2020, although owner optimism peaked in Q4 2020. We observed a decline in sentiment through Q3 2021 as the resurgent pandemic brought uncertainty.
- Business outlook varies across demographics. For example, Black and multiracial owners are the most hopeful that 2021 will be better for business than 2020. By location, the most optimistic owners live in Florida, Georgia, and Texas — states with the fewest pandemic restrictions and earliest reopening dates.
If your company or organization is interested in supporting this important work or gaining insights about your community of business owners, please reach out to [email protected].
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