Pre-Ownership Experience
• About half of all small employers either worked in another small business (32%) or operated their own venture (18%) immediately prior to entering their current enterprise. Those small firms were the incubators for new business owners about 60 percent more frequently than would have been expected given small business’s share of employment.
• Government, including the military, and non-profit organizations were incubators for comparatively few (about one in 10) current small-business owners. However, compared to their share of employment, they were the incubating organization relatively more often than were for-profit businesses employing more than 1,000 people.
• Thirty-six (36) percent of small employers owned and operated at least one business grossing $5,000 or more prior to their current business.
• People tend to form businesses in familiar industries and sell familiar products/services to familiar customers. For example, almost two-thirds (65%) have worked a median of 12 years in the industry in which their current business operates. Twenty-two (22) percent placed their firms in unfamiliar industries and sold unfamiliar products/services to unfamiliar types of customers.
• Most small businesses initially have little or no division of labor. Their owners must therefore be a “jack-of-all-trades.” Eighteen (18) percent of small employers had functional experience in sales/marketing, accounting/finance, production, servicing or operations, and personnel/human resources prior to entering their current business. Another 17 percent had it in three of the four areas. But 23 percent had no experience in any of the four prior to their current enterprise.
• Seventy (70) percent of small employers supervised people prior to entering their current business. Most now manage fewer people than they once did. This is particularly characteristic of those owning ventures now employing fewer than 10 people.
• Almost one in three (30%) participated as volunteers at the highest levels of non-profit organizations prior to entering their current business. The activities of that 30 percent included founding or helping create a non-profit organization with a minimum of 10 volunteers working at any one time, serving as president, chair or treasurer of any such organization or club, and organizing or chairing a fund-raising drive or campaign that netted $10,000 or more.
• Small employers have notably more formal education than the adult population. The former are twice as likely to have earned a college degree and half as likely to have only completed high school or less.
• The most frequent course of study completed by small employers was business administration and related subjects. Fifty-five (55) percent did so. The second most frequently completed course of study was one of the hard sciences including engineering. Except for the few who took advanced degrees in law and health/medicine, those who took business were most likely to find their studies directly relevant to their current enterprise.
