Current in Entrepreneurship Blog

Justworks, in collaboration with The Harris Poll, surveyed employed adults and small business owners to understand how their attitudes toward entrepreneurship and employment have evolved amidst the ongoing economic uncertainty in the U.S. This report follows up on a similar survey conducted a year ago, which explored how concerns about a potential recession were influencing workplace dynamics. The latest findings highlight how entrepreneurial ambitions have gained momentum over the past year.

Key Survey Insights

• Layoff Concerns Decline: In 2023, over 40% of U.S. employees were concerned about layoffs due to economic uncertainty. By 2024, this figure has dropped to 25%.

• Growing Entrepreneurial Interest: Nearly 60% of employed adults express interest in starting their own business, though the biggest obstacles are a lack of funds (39%) and knowledge (29%).

• Generational Drive: Younger generations, particularly Gen Z and Millennials (ages 18-44), show a stronger interest in entrepreneurship.

• Challenges to Starting a Business: Access to capital remains the primary challenge for small business owners, followed by complex tax codes (41%) and payroll management (36%).

• Support Needed for Aspiring Entrepreneurs: Prospective entrepreneurs believe that better understanding financial (34%), operational (32%), and legal (31%) aspects of business, along with mentorship (29%) and access to capital (27%), would boost their confidence.

Employment Uncertainty and Contingency Planning

The current economic landscape is leading many to keep their employment options open. While one-quarter of employed adults are concerned about layoffs in 2024, 20% would consider starting their own business if they were let go. This trend may give rise to "accidental entrepreneurs" as layoffs push more people to explore business ownership.

• Job Market Fluidity: 61% of U.S. adults are open to new job opportunities, with 21% actively searching.

• Layoff Impact: About 8% of adults have been laid off in the past year. Among them, 19% have transitioned to independent contracting, and 18% have started their own business.

• Entrepreneurial Intentions: One in five employed adults would consider entrepreneurship if laid off, particularly those already concerned about job security.

• Economic Outlook: 22% of employed adults do not believe the current economy is conducive to starting a business.

Demographic Disparities

• Ethnic Differences: Hispanic (18%) and Black (14%) workers are more likely than White workers (6%) to have been laid off in the past year. These groups also express higher levels of concern about future layoffs and greater interest in entrepreneurship.

• Confidence Levels: Employed Black adults are more confident in their ability to run a business (84%) compared to their Hispanic (70%) and White (69%) counterparts.

• Perceived Risk: White adults are more likely to view starting a business as risky (90%) compared to Hispanic (82%) and Black (80%) adults.

Fear of Failure and Entrepreneurial Confidence

A significant barrier for potential entrepreneurs is the fear of failure, cited by 59% of small business owners. However, the same percentage agrees that running a small business has been easier than anticipated, with over 90% recommending it to others.

• Building Confidence: To feel more confident about starting a business, many prospective entrepreneurs seek a better understanding of financial (34%), operational (32%), and legal (31%) aspects, along with mentorship (29%) and access to capital (27%).

• Outsourcing as a Solution: 62% of potential entrepreneurs believe they would be more likely to start a business if they could outsource administrative tasks.

Small Business Owners' Experiences

Despite challenges, most small business owners find that certain aspects of running a business, like payroll management and employee onboarding, are easier than expected. However, areas like health benefits management and legal documentation have proven more difficult. Satisfaction with managing these tasks varies, with many seeing room for improvement.

• Top Challenges: Access to money, marketing/brand visibility, and market instability are the top challenges for small business owners.

• HR Tools Utilization: Nearly all business owners use tools like accountants or tax software, but many still wish they had more knowledge about small business tax rules. There is a strong demand for better tools to manage administrative aspects of business, which would allow owners to focus more on core activities.

Generational Differences in Entrepreneurial Aspirations

Younger adults, particularly those aged 18-44, are more inclined to consider entrepreneurship. They are also more likely to gain confidence from seminars, workshops, and increased knowledge about running a business. Many would also prefer to outsource administrative tasks.

• Interest in Entrepreneurship: Younger adults (71% of those aged 18-34) show greater interest in starting a business compared to older age groups.

• Confidence Builders: Key factors that could build confidence among young potential entrepreneurs include better understanding of financial and operational aspects, finding a mentor, and participating in relevant educational programs.

Gender Differences in Entrepreneurship

• Men vs. Women: Men are more likely than women to consider starting a business if laid off (24% vs. 14%). Conversely, women are more likely to express a lack of interest in entrepreneurship (26% vs. 16%).

• Barriers for Women: A notable proportion of women (20%) feel that nothing would help them feel more confident in starting a business, indicating differing attitudes towards entrepreneurship between men and women.

Methodology

The survey was conducted online within the U.S. by The Harris Poll on behalf of Justworks from January 5-9, among 2,094 U.S. adults aged 18 and older, including 1,112 employed respondents. The small business owner survey was conducted from January 5-16 among 300 small business owners. The data is accurate within ±2.5 percentage points for the total sample and ±3.5 percentage points for employed adults, with wider intervals for subgroups.