Solopreneurs are optimistic about 2012, even as they face challenges with cash flow, time management, marketing, and other aspects of their solo businesses. Those are among the findings in The Second-Annual Solopreneur Life 2011 End-of-Year Survey.
The anonymous survey, which was conducted using Survey Monkey and attracted 77 responses, consisted of 25 questions and was conducted during the first three weeks of December. Respondents were able to complete the survey only once.
Here are the major takeaways from the survey.
• Solopreneurs have high hopes for 2012; 53 percent of those surveyed said they expect a revenue increase of 20 percent or more in 2012.
• Nearly 70 percent of those surveyed said they took $40,000 or less out of their businesses in salary and profit in 2011. The amount was unchanged from 2010.
• More than half of solopreneurs said their quality of life improved in 2011.
• Solopreneurs are living on the edge — nearly 60 percent have cash reserves of 1 month or less.
• Three perennial challenges for solopreneurs — cash flow, sales and marketing, and time management — continue to cause the most pain.
• Nearly half of the solopreneurs surveyed take little or no vacation.
To download the complete survey results, click here.
Below are partial results of the survey; I offer a brief analysis after each section.
In the 2011 survey, 67.5 of the respondents were female, 32.5 percent were male.
In 2010, it was 72.2 percent female, 27.8 percent male.
Analysis: Women are driving the solopreneurship bus — there’s no doubt about it.
In the 2011 survey, 15.6 percent said they are 20 to 29 years old; 33.8 percent said 30 to 39; 27.3 percent said 40 to 49; 15.6 percent said 50 to 59.
In the 2010 survey, 8.7 percent said 20 to 29; 26.1 percent said 30 to 39; 30.4 percent said 40 to 49; 20.9 percent said 50 to 59.
Analysis: There was an increased percentage of twentysomethings and thirtysomehthings who participated in the 2011 survey, at the expense of those in their 40s and 50s. For Generation Y, solopreneurship is viewed as a viable option — not a last resort.
In the 2011 survey, 84.4 percent said their primary residence is in the United States.
In the 2011 survey, 72.8 percent had at least a bachelor’s degree.
Analysis: These percentages are essentially unchanged from 2010. I observe it every day — solopreneurs are well-educated.
Age of Your Business
In the 2011 survey, 26 percent said their business is 0 to 1 year old; 26 percent said 2 to 3; and 10 percent said more than 10 years old.
In the 2010 survey, 20 percent said their business was 0 to 1 year old; 14.8 percent said 2 to 3; 18.3 percent said 5 to 10; 19.1 said more than 10 years.
Analysis: The age of the businesses represented in the survey was younger in 2011.
Where Do You Work?
In the 2011 survey, 89.6 said they work in a home office; 5.2 said an office outside the home; 2.6 said they are sharing office space outside the home.
Analysis: These percentages are essentially unchanged from 2010. Being able to “work in your slippers” has a lot of appeal, and it beats paying rent.
Quality of Life
In the 2011 survey: more than half (54.5 percent) of the respondents said their quality of life improved in 2011, while 37 percent said their quality of life remained the same, and 7 percent said it got worse.
In the 2010 survey: 48.7 percent said their quality of life improved, 32.2 percent said it remained the same, and 19.1 percent said it got worse.
Analysis: The percentage of solopreneurs who said their quality of life declined went from the alarming rate of 19.1 percent in 2010 to 7 percent in 2011. This is a shift in the right direction.
How Much Money Did You Make? (salary and profit)
In the 2011 survey, 69.4 percent of respondents made $40,000 or less; 30.6 percent said they made more than $40,000. These results are identical — down to the decimal point — to 2010’s results.
Analysis: If the singular goal for solopreneurs is to make a fortune, then these are bad numbers. Most solopreneurs I encounter aren’t in it for the financial payoff. Having said that, you can’t deny that money is important and that these revenue totals are not strong.
Revenue Change For the Past Year
In the 2011 survey, 28.6 percent of solopreneurs said their combination of salary and profit increased by 20 percent or more; 18.2 said their revenue increased 10 to 19 percent; 14.3 said their revenue increased 1 to 9 percent; 19.5 said their revenue was unchanged; 19.5 percent had a revenue decrease, with 9.1 percent reporting a decrease of 20 percent or more.
In 2011, 61.1 had a revenue increase; 19.5 had unchanged revenue; 19.5 percent had a revenue decrease. In the 2010 survey, 49.5 percent had a revenue increase; 27.8 had unchanged revenue; 22.7 had a revenue decrease.
Analysis: Annual revenue changes are moving in the right direction.
Revenue Expectations for 2012
In the 2011 survey, 53 percent of solopreneurs said they expect a revenue increase of 20 percent or more. Another 24.7 percent believe their revenue will increase 10 to 19 percent. This high level of optimism is essentially unchanged from 2010.
Analysis: Don’t get too carried away by these results, because most solopreneurs are optimistic people by nature.
In the 2011 survey, 36.4 percent of solopreneurs said they have no cash reserves; 23.4 percent have reserves of 0 to 1 month; 29.9 percent have 2 to 5 months of reserves; 3.9 percent have 6 to 10 months; 6.5 percent have 10 months or more.
In the 2010 survey, 24.1 percent said they had no cash reserves; 25 percent had reserves of 0 to 1 month; 25 percent had 2 to 5 months of reserves; 8.9 percent had 6 to 10 months; 17 percent had 10 months or more.
Analysis: Nearly 60 percent of solopreneurs have cash reserves of 1 month or less. If solopreneurs enjoyed increased revenue in 2011, they didn’t use it to fund cash reserves — probably because they needed every dollar that came in to stay afloat.
In the 2011 survey, 49 percent of the respondents said they’re covered by their spouse’s plan; 23 percent said their business pays for health insurance; 22 percent said they have no health insurance; and 5.2 percent said they use a government health plan.
Analysis: Health insurance is a huge issue for solopreneurs: last year 20 percent were uninsured, and the situation didn’t improve in 2011.
What Caused the Most Pain in 2011?
In the 2011 survey, cash flow was the leading cause of pain, with 23.4 percent of respondents citing it; sales and marketing followed at 16.9 percent; and time management was at 13 percent.
In 2010, cash flow was the top response, followed by time management and then sales and marketing.
Analysis: Cash flow, time management, and sales and marketing are the perennial challenges for solopreneurs.
Social Network ROI
The survey asked, “Which social network provides the highest return on investment for your business?”
In the 2011 survey, 43.3 percent said that Facebook yields the highest ROI; 31.3 percent said Twitter has the highest ROI; 25.4 percent said LinkedIn is tops.
In the 2010 survey, all the platforms came in at 33 percent.
Analysis: Facebook was the most effective social-media platform for solo business in 2011, at the expense of LinkedIn. But there’s no finish line in this ever-changing race; for example, next year’s survey will include Google+.
How Many Hours Are You Working Per Week?
In the 2011 survey, 19.5 percent said they work 31 to 40 hours per week; 22.1 percent said they are working 41 to 50 hours per week; 15.6 percent said 51 to 60; 15.6 said 61 to 70.
These percentages are essentially unchanged from 2010.
Analysis: Different people enter solopreneurship with different goals; at one extreme, solopreneurship represents a “business on the side,” for others it’s their entire life. As a result, there’s a wide range in the number of hours that solopreneurs work per week.
How Much Vacation Time Did You Take?
In the 2011 survey, 15.6 percent said they took no vacation; 27.3 percent said 7 days or less; 28.6 percent said 8 to 14 days; 18.2 percent said 15 to 21 days.
These percentages are essentially unchanged from 2010.
Analysis: Solopreneurs often cite “flexibility of my time” as a prime factor for going into business for themselves, yet nearly half of solopreneurs take little or no vacation. This is not a good trend for the long-term sustainability of solo-owned businesses.
Online Tools You Will Use More of in 2012
In the 2011 survey, 75.3 percent said they will use a blog more often in the coming year; 63 percent said their Web site; 60.3 percent said Facebook.
It was the same top three as 2010.
Analysis: Until the online game is changed (and it will, of course), I don’t see the importance of blogging, Web sites, and Facebook going away.
Offline Tools You Will Use More of in 2012
In the 2011 survey, 71.8 percent of solopreneurs said they will use networking events more in the coming year; 47.9 percent said they will use business cards more; 45.1 percent said speaking. (On the low end, 1 percent said newspaper advertising.)
In the 2010 survey: it was the same top three in 2010 (newspapers were at 4 percent).
Analysis: Clearly, solopreneurs see the value of “getting out there,” meeting people in person, and developing business relationships. Print media has virtually disappeared from solo-business marketing efforts.
Use of Outside Vendors
In the 2011 survey, 51.6 percent of respondents said they used accountants in the past year; 46.8 percent said they used coaching/consulting; 24.2 percent said copywriting and bookkeeping.
The only big change from 2010 was in the area of computers (setup, repair, support). In 2010, 29.3 percent said they used outside vendors for computers, and in 2011, only 21 percent said they went outside for computer help.
Analysis: Solopreneurs are a do-it-yourself bunch, but they will break down and get help if they absolutely have to, and obviously accounting and coaching/consulting are perceived as an ongoing need.
What’s Your Opinion on the Survey Results?
Please share your thoughts below.