At last count, there were 29.6 million businesses in the U.S.--and 99.9% of them can be filed under "small." But small is significant. Small businesses (with 500 or fewer employees) have generated 64% of new jobs in the past 15 years and are responsible for 50% of the GDP and 44% of the country's private payroll.
Now a study by the Guardian Life Small Business Research Institute, comparing key traits of small-business owners, provides an insider's view of what qualities set the success-oriented ones apart from their less ambitious peers.
"The Guardian Life Index: What Matters Most to America's Small Business Owners," surveyed more than 1,100 small businesses. Those that projected an annual growth of 10% between 2008 and 2009 and/or intended to expand their business between 2009 and 2010 were identified as "success-oriented." Nearly half the businesses fell into this study group.
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"We wondered if the people who said that they were going to be successful held different ideas and passions to be more important than business owners simply looking to maintain their businesses in coming years," says Mark Wolf, director of the research institute.
Six personality traits emerged. "It really emphasizes that there isn't simply one type of entrepreneurial person," says Patricia Greene, Ph.D., the special academic advisor to the institute and a cofounder of the Diana Project, a multi-university research series on women and business ownership. "These are behaviors, but more importantly, they are behaviors that can be learned."
Collaborative
Success-oriented small-business owners understand how to delegate effectively to others within their business, as well as how to build strong personal relationships with their management team, employees, consultants, vendors and customers.
Collaboration, in the context of this survey, is not only about building the team from within--"giving employees reason to feel better about being a part of the team," says Wolf--but also developing connections outside of the operation. "It's all about networks," says Greene, "because through networking a small-business owner can create opportunities for others and to be able to rely on others to create opportunities for her."
Self-Fulfilled
Success-oriented small-business owners are more desirous of "doing something for a living that I love to do"; "being able to decide how much money I make"; and "being able to have the satisfaction of creating something of value."
Wolf and Greene agree that the takeaway is that entrepreneurism is personal, and that the feeling of being personally fulfilled and in control of one's own career can help drive an individual toward success.
Future-Focused
Planning for both the short- and long-term future are key traits that characterize success-oriented small-business owners. They are more focused on cash flow and more likely to have "a well-thought-out plan to run our business for years into the future" as well as "a well-thought-out plan to run our business day-to-day."
"For entrepreneurs, it's just as important to have long-term vision as it is to have short-term goals," says Greene. "The success-oriented respondents tended to have more directed visions of success."
Curious
Success-oriented small-business owners are more open to learning how others run their businesses. They actively seek best-practice insights regarding management, business innovation and prospecting, as well as finding, motivating and retaining employees.
"We had a number of questions on the interest in learning," says Wolf. For small-business owners, the study shows curiosity isn't just about learning from the trenches, it's about looking for answers outside of yourself and your business.
Tech-Savvy
Technology is a key point of leverage for success-oriented small-business owners. They more intensely value their companies' websites and are significantly more likely to "rely a great deal on technology to help make our business more effective and more efficient."
Wolf notes that the "tech-savvy" dimension doesn't mean blindly going the way of any new technology that comes along. "It's being aware of new technology, and then making choices based on what technology fits within the company's industry and mission," he says. Sometimes the best technology decision is not high-tech at all--think Rich Miller's highly sought "Capitol Fax" newsletter.
Action-Oriented
Success-oriented small-business owners are more committed to "taking the business to the next level"; "differentiating ourselves from our competitors"; and "having something to sell when I'm ready to retire." They also see adversity as a "kick in the rear to help move you forward." Not surprisingly, they are less concerned than other small-business owners about the overall state of the economy.
"When you hear these traits or see them, they make such perfect sense for the small-business owner who is passionate about what they are doing," says Greene. "These successful people are lifelong learners, and the most valuable point of the six dimensions is that they can all be learned."
"The Guardian Life Index: What Matters Most to America's Small Business Owners" was conducted by the Guardian Life Small Business Research Institute, a subsidiary of the Guardian Life Insurance Company of America.
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