A third of business owners believe a lack of access to capital is the biggest problem facing businesses today, a new survey reveals.
While 78 percent of the owners surveyed said they have a solid growth strategy in place, only 40 percent report having access to the funds to make their dreams into realities. That lack of funding is linked directly to stalling revenues.
Of the 559 business owners interviewed, 71 percent said they estimate they could grow their revenues by 25 percent over the next 12 months — if they had access to the credit or capital necessary to finance their growth plans. Without that cash injection, the owners predict, on average, only a 10 percent revenue growth over the next year.
The study shows private business owners feel they are being constrained by access to financial capital,” said Pepperdine University professor John Paglia, who conducted the research.
The business owners’ optimism about their own growth potential seems to reveal a disparity between their assessment of their own businesses’ health versus that of the nation overall. Although 63 percent report increased opportunity for growth in the last six months, the mood darkened when respondents looked outward. The findings:
- 40 percent reported a decline in access to growth capital;
- 55 percent reported a increase in competitive pressures ; and
- 44 percent reported a decline in their confidence in the economy
Paglia believes these disparate outlooks are the reflection of the self-sufficient nature of entrepreneurs.
"Small business owners tend to be more optimistic about their own businesses' potential than the average person," Paglia told BusinessNewsDaily. "That’s why they are the ones who go out and start their own businesses in the first place. A lot of their positive attitude can be attributed to the way they approach problems."
In other words, business owners are more positive about the things over which they feel they have control.
Despite the struggles these business owners report, those just starting their own businesses can take heart. The majority of those interviewed — 85 percent — said they get much more than money out of owning their own businesses. They listed independence, flexibility, enriched experience and the ability to be influential as the top perks that come from owning one’s own business.