If you’ve been thinking about turning your side hustle into a full-time, self-sustaining startup, looking to other small businesses for inspiration is a great place to start.
To help entrepreneurs who are considering launching a new business, SCORE conducted a survey of roughly 1,000 small business startups from across the nation to determine how they got off the ground, what their biggest concerns were, and most importantly, how they managed to attract customers and build their businesses in that all-important first year.
The results were used in SCORE’s fall 2019 “Megaphone of Mainstreet: Startups” data report. Why focus on startups? The number of new business startups is considered a significant factor in the overall economic health of the nation and mentoring small business owners as they embark on their entrepreneurial journey is what we do every day here at SCORE.
SCORE’s latest infographic “Finding Your Way, Finding Customers” highlights the findings of Part 1 of The Megaphone of Main Street Startups Report.
Here are some key takeaways (all statistics are taken from the survey).
Small Businesses Are Not Started on a Whim
One of the more interesting points revealed by the survey is that most small businesses are fueled by passion and experience, not unemployment or underemployment at a previous job. In fact, less than 15% of people started their business because of their current or previous employment situation. Besides passion and experience, nearly 30% of people chose to go into business for themselves out of a desire to have the flexibility and autonomy that comes with being their own boss.
Here’s how the numbers broke down when entrepreneurs were asked the main reason why they started their small businesses:
- Passion for the product/service I provide (40.2%)
- Wanted the flexibility of self-employment (16%)
- Saw a gap in the marketplace that I wanted to fill (15.1%)
- Unemployment or underemployment at my previous job (14.6%)
- Wanted to be my own boss (13.9%)
Startup entrepreneurs relied heavily on their friends, family and mentors for support.
When asked what kept them motivated or inspired when they hit rough patches during the first year, personal support systems were overwhelmingly at the top of the list (respondents were asked to check all that applied).
- Support of family/friends (66.2%)
- Plan for my business idea (43.1%)
- Business mentor (42.9%)
- Personal coach/counseling (30.3%)
- Business networking groups (29.5%)
- How-to training (24.9%)
- Specific advisor in industry/functional area (19.6%)
- Trade associations (9.8%)
- Co-working space (6.0%)
Personal Marketing Markets Best
Just as personal connections were most important to keeping new business owners motivated and inspired, personal connections also served as the most reliable way for startup entrepreneurs to get new business.
Reaching out to personal networks had a 64.9% success rate among those surveyed, followed closely by speaking at events (59.9% success rate).
Here’s how the field broke down (again, respondents were asked to check all the marketing tactics they used):
- 68.9% reached out to personal/professional network and had a 64.9% success rate
- 66.8% used social media marketing with a 52.1% success rate
- 59.8% used Search Engine Optimization tactics and had a 45% success rate
- 57.9% engaged with formal networking groups and saw a 53.6% success rate
- 43.5% tried email marketing, with a 49.2% success rate
- 42.1% launched online ads and saw a success rate of 50.8%
- 39.5% took out print ads, with a 42.2% success rate
- 36.7% spoke at events and saw a whopping 59.9% success rate
- 29.9% tried cold calling and had a success rate of 42.7%
One of the most intriguing statistics included in the report is that the number of respondents who had at least some paying customers at the end of their first year hovered right around 90%! Interestingly, the report makes sure to note that the vast majority of survey takers were SCORE clients who at some point during their first year had taken advantage of the organization’s mentoring, workshops, and/or online educational resources.
If you’re considering turning your side hustle into a startup and want to be among the 89% of startups who had paying customers at the end of their first year, reach out to a SCORE mentor today, and let’s get started. We’re waiting to hear from you!