Small Business Pain Points
To identify "pain points" and unmet needs, via statistics and survey results, of small businesses, globally and regionally. This information will be used to craft a landscape assessment.
Small Business Unmet Needs and Challenges
- According to consultancy Walker Sands, top small business pain points relate to financial concerns (insufficient funding, revenues, or profitability), customer acquisition and retention, and attracting, managing, and retaining high-quality employees. Small businesses also face challenges with marketing (website and search engine optimization), product quality, and competition.
- According to Worldbank, access to financing is a key unmet need of small businesses globally, with 40% of "micro, small and medium enterprises (MSMEs) in developing countries" having an unmet financing need of $5.2 trillion.
- A 2019 global HP survey of small business owners found that 62% were concerned about the sacrifices they made to start their businesses. Top concerns related to sacrificing family time, using personal savings to fund their business, concerns about financial security, and the compulsion to work round-the-clock (even when on vacation).
- A 2018-2019 global TradeGecko survey of small business operators (over 90% having 50 employees or fewer) found that competition was the "single biggest headache" among small business operators in managing their businesses, cited by 21% of respondents. "Managing inventory" (16%), "managing staff" (16%), and accounting (12%) were also operational "pain points" for small business owners.
- The TradeGecko survey also found that competition (31%), time constraints (27%), "hiring the right staff" (26%), operational issues (23%), and sales execution (21%) were the primary factors small business owners felt were inhibiting the growth of their businesses.
Regional Pain Points
- Unmet financing needs are greatest in East Asia and Pacific (accounting for 46% of the financing gap), followed by Latin America and the Caribbean (23% of the financing gap) and Europe and Central Asia (15% of the financing gap).
- A 2019 Guidant Financial survey of 3,100 small business owners in the United States found that "lack of capital or cash" was a concern for nearly one-third (32%) of respondents, while reported personnel challenges ("recruiting and retention" and "managing and providing benefits") were growing concerns.
- With respect to operational "pain points", respondents in the TradeGecko survey found that competition was the "biggest headache" for Australian small business owners (cited by 27% of those in Australia, compared to 20% in the US), while United States respondents felt that managing staff (15% US versus 12% Australia), managing inventory (15% US versus 12% Australia), and accounting (13% US versus 9% Australia) were their "biggest headaches."
- The COVID-19 pandemic has exacerbated financial concerns, with 46% of respondents in an April 2020 Yale University survey of 8,000 US small business owners saying they felt their business would not recover within 2 years and 60% saying they had to lay off at least one employee due to the pandemic.
- An April 2020 CNBC/Survey Monkey report corroborated these findings, with most US small business owners (20 employees or fewer) also citing concerns about the cost of re-opening (advertising, marketing, and investing in personnel and supplies). Still, 15% of respondents in this survey expected to increase staff over the next 12 months, while 63% expected it to remain constant.
- A Salesforce small business trends report found that "money/access to capital", "hiring the right talent", and "insufficient time" were the top three factors "constraining business activity" among firms with 2-20 employees in the European Union. "Employee retention, "managing for future growth", and "meeting customer expectations" were also cited as challenges for EU small business owners.
- A 2018 study of Singapore SMEs found similar "pain points", including challenges such as managing cash flow, hiring and retaining staff, competition, regulation, and protecting assets and patents.
Summary of Early Findings
- In this early research, we found numerous pain points facing global small businesses. Where possible, we leveraged data and surveys associated with small businesses with 50 employees or fewer.
- Lack of access to funding and financial concerns were prominent across the globe, while hiring and retaining staff also emerged as top "pain points."
- European and United States small business owners also cited concerns related to insufficient time as a challenge in their business.
- Australian small business owners (along with most other countries) cited competition as a challenge, while operational issues including "managing inventory" and "accounting" were reported "pain points" in the United States.
- We also found that COVID-19 is exacerbating concerns among small business owners.
- In addition to this public search, we scanned our proprietary research database of over 1 million sources and were unable to find any specific research reports that address your goals.
- Recommendations reflect the information found in early research.
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