Here’s what the future of small business in America could look like

Small Business

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For all the dreamers out there — from career-minded students to venture-seeking entrepreneurs — we bring good news. Long-term employment projections predict double-digit growth in a diverse group of industries that have one thing in common: they are essential to our everyday lives.

According to the U.S. Bureau of Labor Statistics  (BLS), the businesses that will create the most jobs over the next eight years are those that feed us, connect us, and care for us. 

We are talking about health care workers, software developers and, despite the impact of COVID-19, some food service professions, including chefs. Food for thought if you are one of the growing number of people wanting to start a business of your own.

Image Credit: Unsplash.

Up to 3.3 million new jobs

Here's what the future of small business in America could look like

It is no coincidence that these industries have also found themselves on the front line of the COVID-19 pandemic. But even after taking the potential impact of the pandemic into account, the BLS predicts there will be more than 2.6 million of these jobs created by 2029, primarily in software development and health care. At the upper end of the projection, it could be more than 3.3 million.

Image Credit: U.S. Bureau of Labor Statistics / QuickBooks.

What does the future hold for small businesses?

Here's what the future of small business in America could look like

To find out how these three industries have been affected by the pandemic, and how new or emerging businesses can achieve long-term success, QuickBooks surveyed 400 professionals from each industry. We then took our findings to a panel of experts to explore some of the issues they raised in more detail. Read on to see what we learned.

Image Credit: DepositPhotos.com.

Adapting to change

Here's what the future of small business in America could look like

Restaurants, hospitals, and — in a different way — many software companies experienced seismic changes as a result of the COVID-19 pandemic. In this section of the report, we look at what’s driving the most change within each industry today.

Businesses are not only facing disruption from COVID-19

Our 1,200 survey respondents identified COVID-19, new technology, and consumer demand as the top three drivers of change in their industries today, but not necessarily in that order.

Software developers say the most disruption is coming from new technology. People who work in health care and food services put COVID-19 at the top of the list as the recent experience of small business owner  Gretchen Talbert illustrates below:

“We were having our best business year ever, and then COVID hit and every single event canceled. We had to get creative really fast and change our business model completely. We started doing online family meal deliveries and pickup. And we recently started doing some school lunches for private schools. We’re just doing everything we can to find new revenue.”

—Gretchen Talbert, 3 Girls Catering

Image Credit: scaliger / iStock.

The response to COVID-19 has created opportunities as well as challenges

Here's what the future of small business in America could look like

We asked our survey respondents if they have been forced to make any changes at work because of COVID-19. Almost all of them (96%) said they have. Of these, more than half (58%) said the changes are “mostly” or “all” positive.

But we get a new perspective when we break the responses out by industry. By a factor of almost 3-to-1, people who work in food services are more likely to describe the changes triggered by COVID-19 as “negative” compared to people who work in software development.

Image Credit: QuickBooks.

The entrepreneurial spirit is thriving, especially among software developers

Here's what the future of small business in America could look like

As QuickBooks has found in other recent research, one of the unexpected outcomes from COVID-19 appears to be an accelerated pace of innovation and new business creation.

Excluding the existing business owners who completed the survey, 62% of people who work in food services, health care, or software development say they want to start a business. The drive is strongest among software developers, 79% of whom want to be business owners. This figure compares to 60% in food services and 46% in health care.

We can also see how different generations answered this question. According to the data, the most entrepreneurial are Gen Z (68% want to start a business) and Gen X (65%). The least entrepreneurial are Millennials (59%) and Baby Boomers (56%).

Image Credit: QuickBooks.

Plans to start new businesses

Here's what the future of small business in America could look like

“People who are entrepreneurial and have that mindset take a downturn to make an opportunity. You can reinvent yourself or do things differently. When you’ve been laid off, or had a furlough, it gives you time to think and reevaluate your life. Sometimes, this forces people who didn’t consider themselves to be innovators or entrepreneurs to get creative.”

—Deborah Sweeney, MyCorporation

Image Credit: QuickBooks.

How employers define success

Here's what the future of small business in America could look like

For new and prospective business owners to succeed, it helps to know what success looks like. We asked 400 professionals in food services, health care, and software development how both they and their employers define success.

The deceptively simple formula for success in business, according to our 1,200 survey respondents, is to focus on your customers and your finances, typically in that order. People who work in food services and health care said customer satisfaction was the best route to success while for the software industry this came second to financial growth.

Top three definitions of success, according to employers:

  1. Customer satisfaction
  2. Financial growth
  3. Financial stability

“It’s as simple as this: customer experience is a profit driver. People say that when you start a brand-new business, you lose money your first year, break even in your second year, and start to make money in your third. Well, you can either speed that up or slow that down based on customer experience. If customer experience is not somehow weaved into your P&L or your annual reporting, then that probably means you’re not measuring it right, and that’s a big missed opportunity.”

E.J. Kritz, ath Power Consulting

Image Credit: QuickBooks.

How employees and business owners define success

Here's what the future of small business in America could look like

While the survey respondents largely agreed on employers’ definitions of success, we saw significant differences in what success means to them personally. Food service and software development workers are more financially motivated, while health care workers place more value on happiness and personal achievement.

Notable generational differences emerge in this data. Younger respondents (particularly Gen Z but also Millennials) value personal happiness higher than older generations who are conversely more motivated to make other people happy.

Top three definitions of success, according to employees, include:

  1. Personal achievement: Reaching the goals I set for myself.
  2. Financial: I measure success based on how much I earn.
  3. How happy I am: Money is not important to me.

Image Credit: QuickBooks.

How employees and business owners define success

Here's what the future of small business in America could look like

Having established what success means in food services, health care, and software development, we asked how businesses can achieve it. There was a lot of agreement about what to focus on first.

Customer growth predicted to be a challenge for new businesses

Overall, 43% of the 1,200 people surveyed said “building a customer base” would be the biggest challenge new businesses face. While people who work in food services put this at the top of the list, it ranked third for health care and second for software development.

Top challenges for new businesses

  • Food services: Building a customer base
  • Health care: Labor/skills shortages
  • Software: Securing funding

Image Credit: QuickBooks.

How will new business succeed?

Here's what the future of small business in America could look like

Despite the obvious differences between the food services, health care, and software industries, our survey respondents agree that to succeed, you have to give customers what they want. Specifically, this means high-quality products or services delivered with great customer service.

“The old adage is true: You never get a second chance to make a good first impression. Let’s take food services as an example. In the age of social media, you cannot soft open a restaurant anymore. Word is out, and that’s it.”

E.J. Kritz, ath Power Consulting

Top 3 short-term success factors:

  1. Great customer service
  2. Effective marketing and sales
  3. Quality products/services

“Customer service can be one of the most valuable investments you make in your business. Remember, customers contact you when they need you most. Your team needs the time, space and skills to get this right. The secret to success here is to be proactive. Look at every interaction as an opportunity to learn from your customers. By sharing these insights, you can build empathy right across your business.

“At Intuit, we have taken this one step further by using feedback from our customers to build predictive technology that helps them to find solutions before problems arise. With the right approach, you get to build better relationships with your customers and even better products or services. This can be transformational.”

—Todd Stanley, Vice President & Global Customer Success Leader, Intuit QuickBooks

Image Credit: QuickBooks.

Long-term success factors

Here's what the future of small business in America could look like

Top 3 long-term success factors:

  1. Great customer service
  2. Quality products/services
  3. Skilled workers

According to the survey respondents, the value of great customer service never diminishes. But over the longer term, one factor that becomes increasingly important is the quality of your workforce.

“Customer experience starts at the hiring decision. I look at three things: head, heart, briefcase. What do they know? That’s the head. What have they done in their career? That’s the briefcase, the resume. But how do you interview for heart? That’s really tough. But that’s where customer experience is. I need to know you’re going to treat my customers like gold. Understanding how to interview for that behaviorally is not easy, but it’s so important.”

—E.J. Kritz, ath Power Consulting

“I believe success is built on the combination of customer service and technology. You need great employees, of course. But you also need to automate the things that can be automated so your workforce is free to focus on solving bigger problems for customers. This empowers them. It gives them time to focus on excellence, and this benefits them as well as your customers.”

—Deborah Sweeney, MyCorporation

Image Credit: QuickBooks.

Career prospects in food services, health care and software development

Here's what the future of small business in America could look like

Here we reveal how personally and financially rewarding it is to work in the three industries that are the focus of this report. We also find out whether today’s employers and business owners would recommend their career choices to the next generation.

Most people enjoy their jobs, but food service workers are least satisfied

Levels of career satisfaction are generally high. Overall, exactly 4 out of 5 (80%) are satisfied, while just 7% are not. The highest level of satisfaction is among software developers, at 91%. The lowest is among food service workers, at 72%.

The results also reveal generational differences in the responses to this question. Baby Boomers are the most satisfied, while the Gen Z cohort expressed the lowest levels of satisfaction.

Image Credit: QuickBooks.

Most would recommend their career choice to the next generation

Here's what the future of small business in America could look like

While almost three-quarters (74%) of our respondents overall would recommend their career choice to others, enthusiasm is higher in some industries than others.

For example, software developers are the most likely to recommend their profession as a good career choice, but food service workers are the least.

Health care workers fall somewhere in between, with a tendency to both encourage and discourage people from joining the industry. As the competition for talent increases, will employers be able to keep pace with the employment projections?

“The key to long-term, sustainable growth as a business is employer brand. Recruiting the right staff at scale can be extremely costly and time-consuming. But, with strong employer branding, the car practically drives itself. Employees and even unsuccessful applicants become promoters of your brand, and ideal candidates are attracted to your business organically. A strong employer brand is built over time through employee satisfaction, transparency, and content.

“Next time you hire someone, ask yourself why some people would love to work here and why others would hate to work here. Be honest. Don’t sugarcoat it. Use this to build a real picture of the job. To attract the very best, you need an employer brand that is genuine and truthful. It’s all about authenticity, honesty, relatability. Think TikTok, not Photoshop.”

—Marja Verbon, Jump

Image Credit: QuickBooks.

Which industries offer the best prospects for the next generation of workers?

Here's what the future of small business in America could look like

Every professional who contributed to this research was asked to rate the earning potential, job satisfaction, work-life balance, benefits, retirement prospects and job security for people who will be joining their industry over the next decade.

Against 5 out of the 6 measures, software development received the highest scores, with a 91% endorsement for earning potential, 89% for job satisfaction, 77% for work-life balance, 83% for benefits and 78% retirement prospects.

Image Credit: QuickBooks.

Health care job prospects

Here's what the future of small business in America could look like

The only industry to score one higher was health care, securing 85% for job security compared to 82% for the software industry.

Image Credit: QuickBooks.

Food service job prospects

Here's what the future of small business in America could look like

Food services scored lowest against the three remuneration measures (pay, benefits, and retirement potential), while health care performed worst for work-life balance and job satisfaction.

Image Credit: QuickBooks.

Median annual wage in 2019 of 5 fastest-growing occupations

Here's what the future of small business in America could look like

  • Software developers and software quality assurance analysts and testers: $107,510
  • Registered nurses: $73,300
  • Home health and personal care aides: $25,280
  • Fast food and counter workers: $22,740
  • Cooks, restaurant: $27,790

(Source: BLS.gov)

Image Credit: DepositPhotos.com.

Hiring and training priorities

Here's what the future of small business in America could look like

If the BLS predictions are correct, health care, food services, and software businesses will create 1 in every 2 new jobs between now and 2029. That could translate to around 3 million new vacancies that need to be filled, according to the official data. We asked if employers and their workforces are ready for the jobs that need to be done.

Most place a high priority on the need to build a diverse workforce

While the majority of our respondents agree that companies must build workforces that represent the population as a whole, 19% were unsure. This leaves just 4% who see building diversity as a low priority.

Comparatively, health care workers placed less emphasis on workforce diversity, with just 69% saying it is a “moderately” or extremely” high priority. This compares to 74% of people who work in food services and 88% of people who work in the software industry.

Image Credit: QuickBooks.

Food service workers are least satisfied with their education

Here's what the future of small business in America could look like

Overall, 77% of our respondents are “moderately” or “extremely” satisfied with how well their education prepared them for the work they do. This rises to 79% among health care workers and again to 86% among software developers—but falls to just 67% in the food services industry.

When we look at generational differences in the data, we see another clear trend. As we advance through the years from Gen Z to Millennials to Gen X to Boomers, the level of educational satisfaction increases at every step. In other words, the older you are, the more likely you are to be satisfied with the skills you left school with.

Image Credit: QuickBooks.

Will the next generation of workers have the skills they need?

Here's what the future of small business in America could look like

Almost three-quarters (72%) of the respondents are “moderately” or “extremely” confident in the education system’s ability to meet the future needs of the workforce. Confidence is highest among software developers. Despite this, as we reveal below, workplace training remains a top priority for many.

“I think people are going to need to focus on two things: digital skills and leadership skills. Every job is becoming more digital. And if you look at the way the age distribution is going, a lot of people will be leaving the workforce soon. There will be a lot of management and leadership opportunities emerging. If you are in school or want to progress in your career, you can really get ahead if you focus on these skills.”

—Marja Verbon, Jump

Image Credit: QuickBooks.

98% of respondents say new hires need additional training

Here's what the future of small business in America could look like

Just 1% of the 1,200 professionals who responded to our Future of Small Business survey said new hires “never” need extra training to do their jobs effectively. The responses were broadly similar across the food services and health care industries. Software developers were more likely to stress the need for additional training.

Image Credit: QuickBooks.

Predictions from professionals

Here's what the future of small business in America could look like

Will COVID-19 have a lasting effect on the food services, health care, and software industries? What will drive the most growth over the next decade? We asked our survey respondents to give us their perspectives.

Technology will be a major driver of growth, according to the survey participants

New technology, consumer demand, and service or product innovations will be the top three drivers of growth over the next decade, according to the data we collected.

But each industry will chart its own course. Software developers place more emphasis on the importance of technology. Health care workers are more focused on the long-term impact of COVID-19.

Image Credit: QuickBooks.

Research methodology and sample

Here's what the future of small business in America could look like

In December 2020, QuickBooks used an online survey with 29 questions to collect data from 1,200 employees and business owners in the U.S. who work in food services, health care, and software development (400 people for each industry). The audience panels were provided by PollFish, with a 50:50 split between male and female respondents. Just under half (49%) of the respondents are employees; 36% are managers; 7% are directors, vice presidents, or senior vice presidents; and 5% are company presidents or business owners. The remainder describe their job title as “other.”

Note that some survey questions in the charts shown above have been abbreviated for legibility (e.g. neutral questions used in the actual questionnaire, such as “How satisfied or dissatisfied are you…” have been edited to “how satisfied are you…”).

Where percentages in the charts do not add up to 100 this is due to the numbers being rounded to the nearest decimal place for visual clarity.

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This article originally appeared on the QuickBooks Resource Center and was syndicated by MediaFeed.org.

Image Credit: DepositPhotos.com.

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