18 Things Small Business Owners Need to Know

By Rieva Lesonsky


1—The State of U.S. Small Businesses

Overall, American small business owners are approaching 2019 with economic optimism and increased confidence in this lucrative environment, according to a survey from small business financing company Guidant Financial and online credit marketplace LendingClub Corporation. The companies surveyed current and aspiring small business owners about their views on the current state of small business.


Startup motivation: Most small business owners go into business because they’re “ready to be their own boss” (26%) or to “pursue their own passion” (23%).

Don’t worry—be happy: Current business owners are very happy (coming in at 8 on a scale of one to 10), while 53% rank their happiness at 9 or above.

Confidence: SBOs are confident in the state of small business. Only 24% rate their confidence under five on a scale of one to 10. The average SBO ranks 7 on the confidence scale.

Challenges: Employee recruiting and retention became more challenging in 2018. SBOs report a significant 15% increase in challenges with recruiting and retaining employees. The majority of small business owners (41%) only employ two to five employees.

Similar to 2017, the majority of small business owners considered a lack of capital or cash flow one of their major challenges, followed closely by trouble with marketing and advertising, time management, and administration work.

Demographics: Small business continues to be ruled by boomers. 57% of small business owners surveyed were over the age of 50. 73% are male and 25% female.

Profitable: 78% of all respondents are currently profitable, up 6% from the previous year. Half of profitable businesses were purchased as an independent business already in operation, while independent start-up businesses were the next largest segment, at 39%.

Top industries: 2018 brought a notable increase in health, beauty, and fitness businesses such as wellness spas, salons, and gyms with a 34% increase. There was a rise in food businesses and restaurants, a 14% increase. Business services continued to reign as the largest segment, at 11%. Home services overtook automotive businesses this year for the 5th spot.

Financing: While the top five forms of funding remained the same as 2017, there were numerous shifts in less-utilized forms of financing. The share of mortgage refinancing increased by 33%, SBA loans grew by 29%, and home equity line of credit (HELOC) grew 27%.

Cash remains the most popular funding method with 32%. Rollovers for Business Start-ups (ROBS), a method of using retirement funds to start a business without incurring tax penalties, remains in second place at 13%.


2—5 Tips for Building Your Web Presence

Guest post by Suhaib Zaheer, SVP and General Manager of HostGator

1—Select the right domain name: Choosing the right domain can be one of the quickest steps to getting online, but make sure you take a moment to make the right selection. Having a URL that is short, simple and easy to say and understand aloud is critical. To that end, avoid punctuation, unnatural abbreviations or phrases. Keeping your domain name as close as you can to your business name helps. And don’t forget to spend time online looking for businesses and sites with similar domain names and adjust yours, if needed, to avoid confusion and potential lawsuits. If you’re building a social presence, as well, it’s also worth looking at whether your domain name is available as an account name in the social media channels you’ll use since consistency across all platforms is important.

2—Take a mobile-first design approach: When it comes to websites, consumers do judge books by their covers and visitors will decide at a glance whether they want to stay on your site based on its appearance. With roughly half of all web traffic coming from mobile devices, making sure your site looks good on mobile is key. Google’s search algorithm even boosts mobile-friendly sites. Things like a responsive site design that automatically displays your site properly on whatever type of device a visitor is using, readable fonts, touchscreen navigation and compressed image sizes for faster speeds go a long way toward optimizing your presence. You can quickly see whether your site is mobile-friendly by checking out Google’s quick test.

3—Pick a web host that gives your site room to grow: When first getting online, website owners often pick host packages based on what they need now, as opposed to thinking ahead to what they might need to accommodate future growth. If you have a small site without plans to grow, shared hosting might be right for you. But if you plan to scale your business, you’ll need a host that can keep up. Cloud hosting or a dedicated or managed server might be right for you. When making your selection, think to the future and look for a host that can support your traffic and resource needs without dips in performance, especially if you’ll be supporting ecommerce. Another factor is support. Having a support team might not seem like a big deal until you’re experiencing a server issue that impacts your business results or online sales. In those cases, good support is something you’ll want, even though you hopefully won’t need assistance very often.

4—Avoid high bounce rates with quick load times: Speed not only impacts visitor experience, but whether visitors even make it to your site at all since page load time is a factor in Google’s search results rankings and visitors’ patience. More than half of people will abandon a website that takes more than 3 seconds to load, meaning lost sales and conversations if your site is too slow. PageSpeed Insights is a great tool to use to check the loading speed of your site. It will also make suggestions on ways to enhance your speed, if needed. Things like enabling caching, removing plug-ins and add-ons, optimizing image size, minimizing code, and using a CDN all help.

5—Don’t wait to protect your website from hackers: 61% of small businesses have experienced an attack and 54% have experienced a data breach, according to a report from Keeper Security. Many SMBs might not think about website security until it’s too late and that’s what makes them vulnerable. Simple steps like ensuring your website is protected with an SSL certificate are table stakes in web security. This one step can help you retain data integrity by preventing bad actors from modifying the communications between visitors’ computers and business servers or even injecting unwanted content into sites. It also encrypts data so it cannot be stolen. To boot, an SSL certificate helps authenticate your online presence to consumers and can even help boost your ranking in Google search results. Other nice features to have are additional layers of security via tools like SiteLock, along with regular server monitoring.


3—Best Marketing Practices for 2019

Our friends at Alignable, a network of 3 million members in more than 30,000 local communities, surveyed their members to find out what marketing trends business owners need to focus on in 2019.

The results:

  • Invest more in social media marketing. It should be a priority. —19%
  • Great content marketing promises to drive more leads next year. —15%
  • Update your email marketing. It’s one of the least expensive and most effective options. —14%
  • Locally-targeted advertisements. —13%
  • Add more live stream video to engage customers on social media. —12%
  • Adapt SEO efforts to take advantage of the increase in voice search. —8%
  • Reserve budget for direct mail. It isn’t dead & consumers still respond well to it. —8%
  • Enhance the in-store experience for customers. —7%
  • Other—4% (you can share your ideas here on Alignable.)


4—Dream Jobs

What do today’s dream jobs look like? Check out this fascinating infographic from MidAmerica Nazarene University below.


5—What Do Employees Value Most in a Job?

The most important workplace value for full-time employees is fair pay—55% of employees rank “compensates me fairly” as the 1st or 2nd most important workplace attribute, according to a recent survey from Clutch, a B2B ratings and reviews firm.

While every generation ranked fair pay as the most important attribute, generations differed in their level of emphasis. Baby boomers value whether their company compensates them fairly the most (42%), ahead of Generation X (32%) and millennials (29%).

Companies should offer competitive pay to keep employees engaged. For companies that cannot afford that, though, other opportunities can suffice. “I found many individuals highly motivated by loftier titles, added responsibilities, plusher offices, the respect of others in the organization,” says Victor Lipman, author of Type B Manager: Leading Successfully in a Type A World.

Employees value a fair & ethical workplace: The second most important workplace attribute is that the employer “treats its workforce fairly,” with 54% of employees ranking it as the 1st or 2nd most important attribute. “High ethical standards” ranked 3rd, at 38%.

Fairness and ethical standards help an employee feel proud of their work. This is important as work becomes a larger part of employees’ lives. Companies can promote fairness by offering support to employees that start out at a disadvantage and providing compensation based on skill and work, not privilege.

Companies can also promote high ethical standards by creating a code of ethics, rewarding positive behavior in the workplace, and using management to signal the importance of accountability.

Years ago, employees may not have considered the ethics as important to their choice of employer. This has changed. “With a rising awareness of the need for equality now, more than ever before, employees are looking to ensure their workplace is meeting their corporate citizenship and ethical standards,” says Nate Masterson, CEO of Maple Holistics, a bath and beauty company.


6—Facebook Launches New Podcast for Entrepreneurs

Earlier today Facebook launched Three and a Half Degrees, a podcast for aspiring/current entrepreneurs and business leaders, inspired by how technology and instantaneous communication has enabled the world to become closer than we ever imagined—from 6 degrees to 3.5 degrees (hence the name).

The podcast will be available for free on iTunes, Google Podcasts, Spotify, Stitcher and TuneIn. Hosted by David Fischer, Facebook’s VP of Business and Marketing Partnerships, each episode brings together unexpected pairings of business leaders, mavericks and entrepreneurs who share surprising parallels in values, visions, experiences and ideas.

Here’s the episode lineup:

  • 1/14 EPISODE 1: The Power of Social Good Bradford and Bryan Manning from Two Blind Brothers & Blake Mycoskie from TOMS
  • 1/28 EPISODE 2: The Power of Disruption Monique & Chevalo from Charleston Burger Co. & Chris Kempcziski from McDonald’s
  • 2/11 EPISODE 3: The Power of Family Stephanie McMahon from WWE & Gary Vaynerchuk Entrepreneur / Vayner Media
  • 2/25 EPISODE 4: The Power of Purpose Victor Lezama from PC Landing Zone & Jake Wood from Team Rubicon
  • 3/11 EPISODE 5: The Power of Change Suzanne Gildert from Sanctuary and Kindred AI & Beth Comstock* formerly with GE
  • 3/25 EPISODE 6: The Power of Cognitive Diversity Antionette Carroll from Creative Reaction Lab & Jonathan Mildenhall from TwentyFirstCenturyBrand
  • 4/8 FINAL EPISODE 7: The Power of Wisdom Ben Rattray from & Advisor Chip Conley


7—Top 5 Resolutions for Freelancers and Small Business Owners

Freshbooks sends along its top resolutions to freelancers and small business owners should make this January.

1—Maintain a budget: It may seem like a no-brainer (and it is) but according to a report released by Freshbooks, just 45% of freelancers and small business owners actually keep to a budget. If you want to grow your business or protect yourself financially this is the best place to start.

2—Pay yourself a regular salary: It may seem odd to think of your business and personal money being separate—but it should be (more on that later). Successful small business owners often pay themselves a salary to keep their businesses funded for growth or to cover unexpected expenses.

3—Separate your finances: You don’t mix business with pleasure, so why would you mix bank accounts? Separating your personal and business finances protects both you and your business and makes it easier to save for priorities in both areas of your life. It’s also easier when paying taxes.

4—Use an accounting services: The new year is a perfect time to start using dedicated accounting services like Freshbooks to manage your finances and make sure the bookkeeping is done right, especially heading into tax season.

5—Set aside tax money: There’s a reason they call it a tax burden and freelancers feel it most acutely. Shockingly, only 48% prepare for this most inevitable of inevitabilities by putting money away during the course of the year. 2019 should be the year you start.

8—Small Business Resources

The Chamber of Commerce website has so much great information for small business owners. For example, check out this thorough list of vital resources (proud to say we made the list!)

9—Small Business Owners Feel Financially Cut Off from the American Dream

Being your own boss and working for yourself has long been pedestalled as the ideal way to earn a living but the path to doing so, it appears, is far from smooth. In fact, 70% of small business owners feel the ‘American Dream’ is harder to reach than ever, according to new research.

The survey of small and micro business owners examined the challenges of owning and operating a business and found 72% feel the American Dream is harder to achieve than it was, while 35% say it’s a lot harder.

So, is the American Dream still attainable? More than a quarter of small business owners were sadly unable to say yes, but 72% believe it’s still a manageable goal—if certain barriers can be surmounted.

The research, conducted by OnePoll in conjunction with, found the biggest three challenges SBO face are a challenging economy, hiring talented employees and general financial concerns.

But maybe the American Dream is not dead—perhaps it’s just evolved. What does the new American Dream look like? Well, 24% of SBO agree having an education and a job means you’ve successfully achieved it, 48% say homeownership broadly defines the American Dream, and another 48% feel the freedom to live how you want is a critical element.

The survey results also show SBOs recognize that raising capital and the ability to expand is essential in achieving the dream and 78% would gladly take on more debt in order to achieve it.  A further 15% would take on “a lot” more debt to make things happen. SBOs are more comfortable taking on business debt than personal debt.

“Most small business owners take a great deal of pride in bootstrapping their operations from the ground up, and rightly so,” says Brock Blake, CEO and founder of Lendio. “But savvy business owners also understand that a smart, proactive approach to taking on financing can catapult their success. These businesses are better able to support innovation, take advantage of growth opportunities and keep their doors open during tough times.”

Being a risktaker is so often associated with business ownership, but 46% of those surveyed admit it would have benefited their businesses if they had taken more risks early on.

When asked how they currently fund their small business, personal funds came out on top, with 77%, followed by bank loans (34%), and borrowing money from friends and family (16%). And while 78% believe you can maintain a business by bootstrapping and self-financing, 71% say taking on loans and debt can actually lead to more growth down the line. The average small business owner has taken on $72,271 in loans for their business, with 23% saying they’ve taken on even more than that.

Only 40% believe they were able to borrow as much money as they wanted for their business, with 35% saying they feel financially underserved as a small business owner. And 48% would go so far as to call the small business funding ecosystem “broken.”

Top 5 ways small business owners fund their businesses

Personal funds                                            77%
Bank loan                                                   34%
Borrowing from family/friends                      16%
Other funding                                             11%
Donations from family/friends                       9%

Top 10 challenge small business owners face

The economy                                              40%
Hiring talented employees                           38%
Finding/retaining customers                        35%
Money issues                                             31%
Health insurance for employees                   30%
Government regulations                             30%
Trying to do it alone                                   28%
Lack of time                                              26%
Understanding tax code                             23%
Staying current                                         21%

Top 10 elements of the modern American Dream

Homeownership                                                 48%
Freedom to live how you please                           48%
Starting your own business                                 29%
Having minimal debt                                           29%
Retiring eventually                                              24%
Becoming wealthy                                               20%
Having a job in the field you went to school for      18%
Graduating college                                              16%
Having children                                                   11%
Upward social mobility                                         11%

Check out the infographic below for more.


10—Small Businesses Face Growing Retirement Crisis

Is America facing a growing retirement crisis? Yes, according to results from the inaugural Millennium Trust Small Business Retirement Survey, which show 93% of small business owners and 95% of employees agree that Americans will not have enough money saved to maintain their lifestyle upon retirement. Additionally, more than one-quarter of employees have no savings in their retirement plan whatsoever.

The survey—one of the first of its kind to be conducted exclusively with employers that do not offer retirement benefits—was commissioned by Millennium Trust Company, a leading retirement and custody services provider to advisors, financial institutions, businesses and individuals. The results show a significant disconnect between employers and employees when it comes to saving for retirement. While 88% of employees think it’s important to have retirement plans when choosing a new employer, just 67% of small business employers think it’s important to offer a retirement program to employees.

The survey also uncovered differing impressions of how important a retirement savings option is when considering employment:

  • 90% of millennials are most likely to say a retirement savings option is important for staying with a current employer, and 91% identify it as an important factor when considering a new employer.
  • Only 23% of small businesses strongly agree that having a retirement benefit would help them attract and retain talented workers.
  • 55% of small businesses looked at a retirement plan, but still chose not to offer anything while 45% admit they have not spent any time researching retirement programs.

“Our latest survey is a wake-up call for small businesses. Time and time again we hear the value and importance employees place on having retirement plans and how a lack of access to a workplace savings option is contributing to the overall retirement crisis in America,” says Gary Anetsberger, Chief Executive Officer, Millennium Trust Company. “The misperceptions in the market about costs and limited options are hurting small businesses and employees. Traditional 401(k) plans have been great for Americans, but they aren’t a fit for every business. It’s time employers educate themselves on other viable savings solutions that can increase retirement readiness for Americans.”

Millennials are eager to save: For millennials, a workplace retirement savings program is a top priority, with 90% saying it factors when determining to stay with a current employer. Of the younger workforce surveyed, 95% of those age 18 to 34 responded that they would benefit from education on how to manage their activity in preparation for retirement. Ninety% of the younger generation is interested in participating in such programs, compared to 78% of those 55 and older.

Employers look for solutions: Low rates of adoption in retirement plan offerings among small businesses is largely driven by a lack of awareness and understanding. Notably, 51% of companies with 10 or more employees researched offering 401(k) specifically, but only 23% have spent time researching non-401(k) programs for their employees. Overall, 22% of employers cite a lack of understanding around retirement savings options as the biggest barrier for adoption.

However, 70% of employers are likely to consider offering a retirement savings program within the next two years, and 86% say that a program is much more attractive if it poses no additional costs to the company. And 76% of small businesses would also be willing to share in the cost, paying up to $60 per year per employee, to provide that offering. That same percentage would be more likely to consider offering a program if it also allowed them to personally save for retirement.


11—Top Canadian Cities for Tech Startups

Canada is among the top countries for technological advancement, and is home to some of the most high-tech cities in the world. Expert Market’s study takes a closer look at the specific Canadian cities providing the best environment to launch a tech business.

The study investigates the ease of starting a tech business in 25 of Canada’s biggest cities by cross-referencing data on the availability of tech talent, how entrepreneurial the city is, the amount of venture capital available, how fast the internet download speed is and the cost of living for potential employees to determine the best place to launch a tech business in Canada.

Key findings 

Ontarian Tri-Cities, Kitchener-Cambridge-Waterloo, lead the way as the number-one location to start a tech business. Ranking in the top 10 for every factor, with a particularly strong USD$12 million/CAD$15.5 million investment funding available per 100k people.

Surprisingly, capital city Ottawa does not rank in the top 3, due to its cost of living ranking 8th highest in the study. High living costs can deter young tech graduates.

Tech talent mecca Toronto just missed out as the tech capital but is another top choice for budding tech entrepreneurs wanting to start a business, boosting 44 higher education tech courses.

Montreal rounds out the top 3 and is the best place for venture capital funding, offering USD$16.5 million per 100k people, the biggest money pot of any Canadian city.

The availability of tech talent and infrastructure to entrepreneurs in Canadian cities is even outpacing that of cities in the U.S., with Toronto dubbed “Silicon Valley North”. Expert Market’s study is the first to look at all the major Canadian cities with the specific focus on tech enterprise.


12—We Have a Winner

The 2018 Independent Small Business of the Year award recipient is Suddenly Samantha Salon in Easton, Pennsylvania, which supports and hosts numerous community service projects throughout the year and provides a safe haven for the homeless on Christmas day.

For nine years, Stephen Flowers, owner of Suddenly Samantha Salon, has postponed his own Christmas celebrations to spend the day in his hair salon, offering free haircuts, a hot meal and fellowship to hundreds of those in need. The annual event dubbed “Grand Christmas” stemmed from a chance encounter with a homeless man asking for money one Christmas morning. They shared a meal, Flowers offered him a haircut and thus began “Grand Christmas.”

“Every year, we are inspired by the community support that nominees receive from across the country. We couldn’t be more pleased to recognize Suddenly Samantha Salon as the Indie Award winner in 2018,” said Bill Brunelle, co-founder of Independent We Stand. “The shop is a perfect example of how independent businesses impact their communities through unique products and services. The salon’s dedication to the homeless and various other community programs to help men, women and children exemplify the spirit and impact of small businesses to all of us.”

Flowers’ efforts extend far beyond Christmas day. Suddenly Samantha hosts numerous events throughout the year, plus Flowers and his staff open their doors for four hours every Monday, a day salons are traditionally closed, to give free haircuts to the homeless.

Suddenly Samantha Salon will receive a prize package valued at more than $25,000.

Independent We Stand, a national small business movement, empowers Americans to recognize local businesses that focus on their customers and communities through the Indie Award. To learn more about the Independent Small Business of the Year award, visit or


13—Guide to Vitamins

We don’t ordinarily cover health topics here, but since it’s January and many of us are still sticking to our New Year’s resolutions, take a look at the infographic below from to find out which vitamins can help you stay healthy and be a better business owner.


Quick Takes

14—A survey taken late last year by West Monroe Partners indicates your employees are likely looking for new jobs right now! The survey showed 51% of workers return to work in January feeling either unmotivated (25%) or overwhelmed (26%).

15—Want to know more about global entry? Check out this thorough guide from Upgraded Points.

16—Can drinking green tea make your healthier? Groom + Style gives us the scoop

17—Is Pokémon Go a community builder? This report in The Manifest is fascinating.

18—Chargebacks costs retailers millions. Fight the fraud with tips from Chargeback Gurus in their new guide, Why Chargebacks are No Longer a Cost of Doing Business.

Business stock photo by XiXinXing/Shutterstock