Survey Reveals a Positive Outlook on Business Ownership
More than two years of research from FranchiseInsights.com indicates that American entrepreneurs are bullish on their opportunities. That optimism prevailed even in the face of inflation, rising interest rates, stock market volatility, supply chain problems, Russia’s invasion of Ukraine and the ongoing pandemic.
In a climate of uncertainty, you would think Americans would be more risk-averse, but it turns out that the opposite is true. Americans are going big and moving into entrepreneurship and away from the 9-5 grind. We have seen a mass exodus from corporate America with the Great Resignation. Since the pandemic started, people have been leaving their jobs in droves to find greater flexibility and control over their own destinies. Americans are no longer settling for mediocrity in fear of losing security. According to the Washington Post, 4.3 million people quit their jobs in January 2022.
As it turns out, business ownership has become a great alternative to working in corporate America. Data from the Census Bureau revealed a 24 percent increase in business applications in 2020, the highest jump since it started tracking the data in 2004. Franchising makes the path to business ownership easier and attracts people who don’t want to go through the trial and error of starting everything themselves. Through franchising, aspiring entrepreneurs can step right into a proven business model with training and support.
Optimism For Business Ownership
If you have been considering business ownership, you are not alone. FranchiseInsights.com conducts monthly surveys of people looking into franchises and other business opportunities. Survey results reveal a resilient optimism among U.S. entrepreneurs. For a deep dive into America’s attitudes toward business ownership, we have compiled highlights from FranchiseInsights.com’s findings since early 2020.
- Inflation hit a four-decade peak in April of this year and the worst Standard & Poor’s decline since 1970. But according to an April survey, 59.3% of aspiring business owners nevertheless had firm plans to start a business within the next three months, and 67.2% were “more or much more likely” to move forward than in the previous three-month period. As for the pandemic’s effect on their plans, 40.5% said it increased their determination to chart their own future via business ownership. Slightly over three-quarters of respondents saw business conditions about the same or getting better in the next three months.
- In March 2022, 52.9% of aspiring business owners were resolute about starting their businesses within the next three months despite inflation, a roller-coaster stock market and the war in Ukraine. Further, 80.5% of those respondents saw stable or improving business conditions in the next three months. About 67.7% of would-be entrepreneurs agreed or strongly agreed that “now is a good time to start a business,” a decline from 73.5% in February’s Small Business Startup Sentiment Index by FranchiseInsights.com. About 22.4% said the pandemic is no longer a factor, but 48% said it reduced the capital they had available for investing.
- Some March findings echo those from January 2022, such as 53.1% of aspiring business owners being resolute about starting their businesses within the next three months. But their outlook had become more optimistic, with 86.4% of respondents predicting business conditions would be stable or improving during the next three months. More than 63% of would-be entrepreneurs agreed or strongly agreed that “now is a good time to start a business.”
Entrepreneurs Want to Start a New Business Now
Entrepreneurs aren’t waiting to see what will happen; they are going for it. They are heading into business ownership with a can-do attitude and a positive outlook. And franchise ownership is particularly compelling. The industry is growing, and so is the interest in it. At IFPG, we are seeing this trend firsthand. Our territory checks (an inquiry to see if a particular area is available to open a franchise) have increased year-over-year. In 2022, we have already had 58,677 territory checks. In all of 2021, the number was 30,770; in 2020, we had 17,994; in 2019, we had 10,403; 2018 saw just 7,133. Imagine what 2023 will bring! Here are some more amazing numbers to consider from FranchiseInsights.com:
- In polling from Nov. 23-30, 2021, 62.2% of entrepreneurs agreed or strongly agreed that “now is a good time to start a business,” which was a decline from 73.4% in September 2021. This survey was conducted during the Thanksgiving holiday weekend when the Omicron variant was raging.
- In October of last year, a noteworthy finding was that 58.6% of respondents planned to leave their full-time jobs as part of the Great Resignation.
- FranchiseInsights.com reported that the pandemic heightened 44.4% of the respondents’ interest in business ownership, per a July survey.
- A June 2021 survey had dramatic findings, with 76.9% agreeing or strongly agreeing that “now is a good time to start a business,” a total in excess of pre-pandemic levels and reflecting the highest percentage in survey history. The U.S. Census Bureau had a corresponding surge in business applications; a record 34.6% wanted to launch their businesses within the next 30 days, the bureau reported.
Entrepreneurial Enthusiasm on the Rise
Despite the lingering threat of Covid-19, entrepreneurs have rising enthusiasm for investing in franchises. Here are some more compelling stats from FranchiseInsights.com’s findings.
- From January through April 2021, entrepreneurship and entrepreneurial dreams thrived. In January, shortly after President Biden was inaugurated and vaccine availability was increasing, 25.6% of entrepreneurs surveyed were planning to launch businesses in four to six months. In February, entrepreneurs expressing intent to start or buy “this month” rose to a record 31.2% of respondents. In March, 69.3% of respondents (a 12-month high) agreed or strongly agreed that “now is a good time to start a business,” which at that time was the largest percentage since February 2020, when the pandemic began making headlines. And in April, 65.4% of entrepreneurs surveyed agreed or strongly agreed that “now is a good time to start a business.”
- In October 2020, entrepreneurial optimism increased for a third consecutive month, with 60.6% of potential business buyers saying “now is a good time to start a business.” This survey occurred about a week before the presidential election.
- Entrepreneurs in June 2020 expressed rising enthusiasm for investing in franchises that had been slammed by the Covid-19 pandemic. And the number of concepts seeking franchisees also increased.
- From January to February 2020, prospective buyers of small businesses indicated a nice bump in confidence, with 76% in February saying they agreed or strongly agreed that “now is a good time to start a business.” That number was only 63% in January 2020.
There’s never been a better time than now to open a franchise! While the pandemic, the U.S. political climate, Russian aggression and the economy have caused some ups and downs in the attitudes of wannabe entrepreneurs, optimism has prevailed. FranchiseInsights.com gives detailed findings here.
By: Red Boswell is President of the International Franchise Professionals Group (IFPG), a membership-based franchise consulting network with more than 1,200 franchisors, franchise consultants and vendor members. Together, IFPG members guide aspiring business owners through identifying and investing in franchise businesses.
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