Mom and Pop Work Long Hours but Like Being the Boss
Mom and pop businesses aren't nearly as small as they appear. There are 22 million businesses in the United States with five or fewer employees. Together, they produce more than $1 trillion in annual revenues. Major credit card companies and banks have descended on the sector, jostling to get the business of small business, and several—American Express and Discover, most notably—have begun publishing regular surveys examining this corner of Main Street.
Contrary to what political candidates may say in their 30-second spots, small-business people aren't as easy to pigeonhole as you might think, these studies have found. Discover's "Small Business Watch," which celebrates its first anniversary this month, polls 1,000 owners of businesses with five workers or fewer, plus 4,000 of their customers, every month about their take on the economy. Mom and pop, these polls show, aren't quite who you think they are. U.S. News takes a look back at a year's worth of Discover's insights into the real world of small business.
On being your own boss. Even if they were offered more money, 61 percent of small-business owners would choose to run their own business instead of working for someone else. Most small-business people aren't trying to be the next Bill Gates: Sixty-seven percent would rather stay small than grow into a big business.
On "normal" work hours. Small-business people work hard—really hard. More than 4 in 10 work at least six days a week, and 52 percent take less than a week off a year. When they aren't at work, 59 percent still take calls and E-mails.
On the summer "decline." Conventional wisdom has it that small business gets hung out to dry during the summer when customers go on vacation. But that may not be the case: Seventy-six percent of owners say their business increases or stays the same during the dog days.
On the stock market. The media may hold their breath with every bump in the Dow, but small-business people don't. Nearly 70 percent say changes in the stock market don't have an impact on their business. Over half insist the stock market doesn't reflect their daily economic reality.
On fuel prices. The sky may not be falling after all. While 39 percent of small-biz owners called rising oil prices a major issue, the majority—61 percent—say they are minor or of no consequence. Surprisingly, 42 percent of small-business owners say they have no significant energy expenses at all.
On healthcare. While gas prices may not be an albatross around the neck of small business, there's no question healthcare is: Sixty-four percent of small-business people say healthcare costs affect their ability to grow. Almost 3 in 4 provide no healthcare benefits to their employees at all. Meanwhile, their employees are getting antsy: Seventy-one percent of workers say healthcare benefits are either "very important" or "somewhat important" when choosing a job. One possible solution doesn't make many owners happy, though: Sixty percent say a government mandate to provide healthcare would hurt business.
On the minimum wage. Every election year, some candidates call for raising the minimum wage; others say it would hurt small businesses. This spring, with the Democrats in control, Congress bumped the minimum wage up to $7.25 an hour, from $5.15, in three yearly installments. What has it meant for small business? Before Congress acted, 70 percent of small-business owners said the increase would have no impact on their employee costs, largely because they are already paying more than the minimum wage. Who wants to call Washington?
The Little Guy Feels the Credit Crunch
Small-business people may be largely unaffected by swings in the stock market, but that doesn't mean they're invulnerable to this summer's mortgage fallout. In a survey released last week, more than a third of small-business owners told Discover that housing's slide—and the ensuing credit crisis—are having a significant impact on their business. Only 12 percent have applied for credit in recent months, but a third say their businesses would be hurt if obtaining credit were to get more difficult.
This story appears in the September 10, 2007 print edition of U.S. News & World Report.