In recognition of Small Business Month, Block Advisors by H&R
Block (NYSE: HRB) has released data¹ revealing that today’s small
business owners are younger and more diverse with clear motivations
for pursuing their business ventures. And, despite operating in an
uncertain economic environment, small business owners report that
the last three months have yielded solid performance, with more
than 80% showing high confidence in carrying out day-to-day
business tasks. These include billing and accounts receivable
tasks, payroll, and timely invoicing – all required for running
successful businesses, big or small.
“It’s exciting to see the new small business owner who is not
only thinking of today, but proactively ensuring success for the
future,” said Jamil Khan, Chief Strategy & Small Business
Officer. “New kinds of small business owners mean new business
models. Good news is that a wide range of help in the form of care
and expertise is available to help as they remain resilient.”
Small business ownership is where diversity, youth and
varying motivations meet
Among Black, Indigenous, and People of Color (BIPOC) small
business owners, 15% are Gen Z and 44% are Millennial, in
comparison to white small business owners who are only 4% Gen Z and
29% Millennial. And while optimism and confidence run high,
challenges of sourcing capital remain prevalent for Black,
Indigenous, and People of Color (BIPOC), women and Gen Z business
owners, according to those surveyed.
But whether stemming from interests and passions, or out of
necessity, the new class of small business owners are proving to be
resilient and nimble in pursuing ventures that best suit them, and
their families, for years to come.
When looking at today’s younger, diverse small business owners,
motivations differ across key groups:
- 71% of BIPOC respondents are more likely than their
counterparts (47%) to indicate that passing generational wealth to
their children is a motivation
- 99% of Gen Z and 97% of Millennials say the ability to be their
own boss is their top motivation, while women also say it is their
top motivation (97%)
- 96% of Gen Z and 88% of Millennials say pursuing a passion is
one of their top motivations
- 94% of women say taking control of their destiny is their top
motivation for pursuing their small business
These insights into specific motivations for starting a business
underscore today’s “go-getter” attitude of the new small business
owner and indicates an eagerness to break away from their
traditional work mold.
Today’s small business owner leads with resilience and
confidence, but continues experiencing challenges toward sourcing
capital
Economic uncertainties have not hindered success, as 40% of
those surveyed say that business revenue has grown over the last
three months. When looking at BIPOC and Gen Z owners, this
percentage increases to 50% and 60%, respectively.
This success is a testament to small business owners’ confidence
and ability to tackle various tasks needed for running a successful
business. Across a wide range of specific managerial duties, at
least 82% or more confirmed they are confident when it comes to
managing bills and accounts receivable, paying employees in a
timely manner, processing invoices, managing business cash flow,
and staying in compliance with payroll taxes. That said, topping
the list of the most disliked task is that of overall tax
preparation (46%).
Tax preparation aside, other pain points stem from hurdles that
are out of their control such as sourcing capital and securing
loans, with 50% of small business owners finding it difficult to
get a loan from a bank. As a result, these young entrepreneurs are
left to explore alternative methods such as getting funds from
family and friends or going outside of their networks to acquire
capital.
The road to starting a small business looks different
for BIPOC and women owners
who need investments
BIPOC small business owners continue experiencing financial
hurdles, citing they are less likely to easily raise money from
friends and family in comparison to white business owners, and are
more likely to have difficulty getting a loan from a bank (58% vs.
46% white business owners). Women owners have trouble on both
fronts. When compared to their male counterparts, women are less
likely to attempt to get a loan from a bank and see significantly
less success in raising money from investors.
“From starting a business to effectively maintaining one, owners
face challenges at various stages of their ventures,” said Khan.
“The good news for them is that resources like those available at
Block Advisors are here to support with bookkeeping, payroll
services and tax preparation. And we can offer them with confidence
because of our expert understanding of small business owner
needs.”
To learn more about Block Advisors, visit
https://www.blockadvisors.com/ or the Block Advisors office nearest
you. And, if you filed for a tax extension, remember you have until
Sunday, October 15 to finish filing.
1A Small Business Resilience Survey was conducted among 1,013
American small business owners, 18+ from April 27-May 2, 2023 using
the field services of Qualtrics.
About the “Small Business Resilience Series”
survey
Block Advisors was founded with the mission to serve small
businesses. That’s why it commissioned a survey with more than
1,000 business owners to inform the “Small Business Resilience
Series.” Each year, Block Advisors’ release of this data gives a
snapshot of America’s small business landscape. With 8,000 offices
nationwide, Block Advisors is available to help small business
owners year-round with their specialized tax, bookkeeping, payroll,
and other needs.
About H&R Block
H&R Block, Inc. (NYSE: HRB) provides help and inspires
confidence in its clients and communities everywhere through
global tax preparation services, financial products,
and small business solutions. The company blends digital
innovation with human expertise and care as it helps people get the
best outcome at tax time and also be better with money using its
mobile banking app, Spruce. Through Block
Advisors and Wave, the company helps small business
owners thrive with year-round bookkeeping, payroll, advisory, and
payment processing solutions. For more information, H&R
Block News or follow @HRBlockNews on Twitter.
For Further Information
Investor Relations: Michaella Gallina, (816) 854-3022, michaella.gallina@hrblock.com
Jordyn Eskijian, (816) 854-5674, jordyn.eskijian@hrblock.com
Media Relations: Angela Davied, (816) 854-5798, angela.davied@hrblock.com
Heather Woodard, (660) 864-3836, heather.woodard@hrblock.com
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