The Four Types of Small Business Owners

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by Ayaz Nanji
 

Small business owners generally fall into one of four attitudinal segments, each of which has its own unique mindset and behaviors, according to a recent report from Infusionsoft.

The four profiles are based on data from a survey of 850 US small business owners (50% B2C-focused, 28% B2B, 22% hybrid) that explored respondents’ feelings about ownership, goals, challenges, and resources.

The researchers found respondents fell into four distinct groups—Freedom Seekers, Passionate Creators, Struggling Survivors, and Legacy Builders—with each accounting for roughly a quarter of the total.

Below, key insights from the report about each type of small business owner.

Freedom Seekers

Freedom Seekers are people who primarily started their businesses to control their own fates, specifically regarding decisions, work environment, schedule, and revenue.

These respondents are much more likely than other segments to cite “Reducing the amount of time I have to work” as a key goal. Correspondingly, they cite “Time to get everything done” as their biggest challenge.

  • 65% consider themselves entrepreneurs.
  • 56% say they would “absolutely not” work for somebody else in the future.
  • They are likely to use bookkeeping or accounting software (57%), email marketing automation (61%), and e-commerce order and payment processing (47%), CRM (46%), email autoresponder (44%), and contact management software (38%).

Passionate Creators

Passionate Creators started their businesses because they care deeply about what they do. When asked about their goals, “Doing the work I love” was an overwhelmingly favored answer for this group.

  • 48% say they always knew they would run their own business.
  • 73% consider themselves “definitely” entrepreneurs.
  • 53% say that helping other business owners be successful is an extremely important goal for them.
  • This segment is the most likely to have five or more employees (31%), to work in an office (43%), and to have businesses that have generated more than $100,000 in gross income in 2013 (54%). They are also most likely to say they will generate “much higher” revenue this year (30%).
  • Passionate Creators are the most likely to use a wide range of business tools, from accounting software to CRM and automated marketing programs.

Legacy Builders

Legacy Builders are more likely than the other groups to have started their business with a family member (24%). They see small businesses as a practical economic choice and they are by far the most likely group to feel that most people would start their own business if they could.

  • They are the least likely of the four segments to have earned a college or post-graduate degree.
  • 52% consider themselves entrepreneurs.
  • They are the most likely of the four profiles to run only one business (80%) and least likely to have considered closing (26%) or selling (24%) their business.
  • Legacy Builders are the least likely group to have a website (45%). Even those that do have a site are less likely to use CRM, payment processing, and other tools to run their business, or to use email, content marketing, SEO, PPC, or marketing automation to generate leads.

Struggling Survivors

Struggling Survivors have significant concerns about the value of owning a small business: 60% agree strongly that “You have to be a little crazy to start a business,” and 40% agree that “Corporate jobs are more secure than starting your own business”—significantly more than other segments.

  • 50% consider themselves entrepreneurs.
  • 51% are the only employees in their business.
  • Struggling Survivors are the most likely of the four groups to have considered closing their business (53%).
  • Only 16% say the financial security of their family is much better than it would be if they had a traditional job, and 38% say it’s the same or worse.

About the research: The report was based on data from a survey of 850 small business owners (50% B2C-focused, 28% B2B, 22% hybrid) that explored respondents’ feelings about ownership, goals, challenges, and resources.