Americans Put High Priority on Owning a Business for Future Economic Stability
With the ongoing housing crisis (among other financial anxieties) causing Americans great economic stress, many say they believe it is more beneficial to focus on owning a business than owning a house.
In Intuit QuickBooks’ recently released a report titled “Entrepreneurship in 2024 Report,” which examined SMB and entrepreneurial trends for 2024 with a survey of more than 4,500 adults in the U.S., researchers found that 66 percent of seasoned and aspiring entrepreneurs alike believe that “starting a business is the best way to build their personal wealth, as opposed to buying a house.” Nearly a quarter of respondents went on to report that they are currently considering building their own business.
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Generation Z has been widely reported as being the generation most interested in creating a side hustle/SMB. Eighty-eight percent of Generation Z SMB owners are looking to expand their e-commerce operations or physical locations to boost their revenue, with 76 percent looking to hire more people this year.
Despite artificial intelligence being 2023’s hot topic in every sector, SMB owner survey respondents said that hiring skilled workers was the top way to drive growth. Closely behind, SMB owners cited investments in social media and e-commerce as leading ways to drive growth ahead of securing financial backing or loans. Additionally, the report found that 32 percent of SMBs created since 2020 were partly funded through tax returns. Notably, the authors said, 2024 tax refunds will impact the growth of businesses and their formations, as 65 percent of people polled said a smaller return will make it harder for them to start their businesses.
Meanwhile, the report also revealed inflation and unfavorable interest rates as the “biggest threats to building personal wealth in 2024.” According to the company’s survey, 57 percent of people had been boosting income through side hustles amid inflation and economic uncertainties — similar to those who cited the COVID-19 pandemic as an influence. The continued higher interest rates will also be a hindrance in 2024, making it more expensive for SMBs to borrow money.
Importantly, according to Intuit QuickBooks’ 2023 “Small Business Index Annual Report,” SMBs relying on credit cards to manage their cash flow has become the new norm (83 percent). Nearly 60 percent of people said credit cards are their “emergency or temporary source of funding.”
When prompted to define how they would define success, 41 percent of SMBs reported that earning $75,000 is the threshold that makes them feel successful and 42 percent of people said that increasing revenue and financial growth is the major goal for the year. The generation with the highest bar set for success is Millennials, who said on average they would need to make $288,000 to feel successful.
Out of 1,000 side-hustle SMB owners, more than 60 percent said they would quit their day job if they earned more than $100,000 annually — they added that “keeping a stable income” is the primary reason for keeping a 9-to-5 day job, followed by health care and other corporate benefits.
The authors of the report said that inflation, unfavorable interest rates and tax refunds will greatly determine the success or failure of SMBs in 2024 with the financial uncertainties, the upcoming election year and political turmoil domestically and abroad that continue to create fluctuations in the global economy.
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