24 Million Americans Would Rather be Entrepreneurs
By Isaac M. O'Bannon
A new report shows that 24 million Americans want to leave traditional employment to become their own boss by 2021, but face barriers to making the leap. The report, “Self-Employment in America Report 2019,” was commissioned by FreshBooks, a maker of cloud small business accounting software.
FreshBooks partnered with leading market research provider Dynata to collect data from more than 3,700 Americans who work full time—either as traditional employees, independent professionals or small business owners.
“Tens of millions of Americans have told us that their ‘dream job’ is to work for themselves,” said Mike McDerment, Co-founder and CEO at FreshBooks. “But this is a scary proposition for most because the world is in many ways not ready for them. The good news is that the payoffs—both financial and otherwise—are real. It’s a big part of our job, for those just starting out and those who’ve been at it a while, to help entrepreneurs realize their full potential.”
Key findings from the report include:
Self-employment is the new American dream— but millions are ‘stuck’ on the sidelines. What’s holding them back?
24 million Americans—more than the population of Florida—want to work for themselves by 2021. There is no doubt a significant mindset shift underway; however millions of aspiring entrepreneurs say they face barriers to making the switch:
35 percent worry about inconsistent income
28 percent don’t have the cash to invest or need to pay down debt first
27 percent lack a complete business plan
27 percent worry about earning less money
20 percent don’t want to give up health benefits
Self-employed Americans are happier, healthier and have no desire to return to a ‘regular job’ anytime soon
The study sheds light on why so many want to be their own boss. Currently, Americans who work for themselves report high levels of satisfaction and well-being:
96 percent have no desire to return to a ‘regular job’
7 in 10 (or 70 percent) say they have better work-life balance
61 percent would be happy with their achievements if their career ended today
55 percent say they have less stress
54 percent say they are healthier
27 percent spend more time outdoors and travel more
Career control is the #1 reason driving people to self-employment
What is it exactly, that motivates people to abandon the security of a 9-to-5 job and a regular paycheck? The majority of people aspiring to work for themselves are seeking freedom, flexibility and control:
65 percent want to choose when they work
56 percent want to choose how hard they work
48 percent want control over their own career development
47 percent want control over where they work
1 in 3 (or 31 percent) simply don’t like reporting to others
Small businesses (and their owners) are getting younger
Two years ago, the ‘typical’ self-employed professional was a tail-end Baby Boomer, but we’re fast approaching the point where Millennials become the dominant self-employed workforce. This is not simply due to changing demographics, but also because Americans are choosing to become entrepreneurs earlier in their careers. The age of new business owners in the U.S. has dropped by 4 years (from 38 to 34 years old) since 2017.
College education is becoming less of a prerequisite
Should current trends persist, we might soon see the majority of self-employed Americans thriving without the benefit of a college degree. Over the last two years, the number of self-employed professionals with a college degree dropped by 8 percent. Among small businesses founded in the last two years, there’s no difference in revenue comparing those with and without college degrees.
Self-employed Americans typically earn more money and are more productive after making the switch
While 63 percent of self-employed Americans believe money is less important than quality of life, 55 percent say they’re earning more of the green stuff working for themselves. 4 in 10 work fewer hours but are more productive.
A Small Business Brain Drain might be on the horizon
Who’s most likely to be eyeing self-employment within the next two years? Contrary to popular belief, those most eager to leave traditional work are not looking to escape large corporations or cubicle farms. Actually, the opposite appears to be true. A much higher proportion (35 percent) of employees working at companies with less than 50 employees want to work for themselves within the next two years, compared to only 25 percent of employees at larger companies. This corresponds with another key research finding: small business owners currently struggle with finding talented staff or contractors more so than any other challenge, including finding new clients.