Thriving as an entrepreneur is an extremely attractive concept for many, and you can see why — the thought of applying your passion, dedication, and savvy to create and profit from something truly yours is starry-eyed daydream material.
With that said, entrepreneurship is anything but easy to navigate (a wild take, I know) — and the life of a business owner comes with a host of challenges, choices, potential pitfalls, and common hiccups.
That‘s why HubSpot recently surveyed over 200 business owners to get a pulse on the current state of entrepreneurship — a report that covers key elements like business owners’ motivations, their pain points, the various strategies they leverage, and plenty more. Check out some of the report’s key findings here, and get some crucial perspective on how the entrepreneurial community operates 2024.
The State of Entrepreneurship Report: Key Findings
1. Most entrepreneurs wanted a lifestyle change more than they wanted to pursue their passion.
It‘s safe to say that entrepreneurs are generally passionate people. I don’t think I’ve ever seen a Shark Tank pitch where the statement of purpose was, “I don’t really care about ‘why’ I’m doing this, per se. That’s kind of a non-factor for me. Anyway, give me money.”
With that said, our research indicates that “passion” generally isn‘t entrepreneurship’s main selling point for business owners. That distinction goes to “career or lifestyle changes” — with 70% of our survey respondents citing that factor as their primary motivation for starting a business.
According to our research:
- 45% of entrepreneurs started their business because they wanted to be their own boss or escape 9-5s.
- 16% wanted more income.
- 9% said it was the result of a life transition.
Only 26% said their primary motivation was following a business they were passionate about or a unique opportunity.
2. Employee referrals are the most popular hiring method among entrepreneurs.
People trust their people.
That’s both a fact of life and a trend that carries over to how entrepreneurs prefer to source their workforces in 2024 — meaning entrepreneurs generally favor employee referrals as their preferred hiring method. According to our research:
- 77% of entrepreneurs say they use employee referrals to source new employees.
- 37% of entrepreneurs say they use the platform for hiring.
- 31% say they use job sites and boards.
- 12% use recruiting agencies.
- 9% use hiring events.
- 2% use higher ed programs.
3. The most common pain points entrepreneurs experience are finance-related.
Of all the painful pain points entrepreneurs painfully endure in pain, financial pain points are some of the most particularly painful.
According to our survey: 54% of our survey respondents cited struggles with earning and maintaining financing as the most pressing issue they run into. When asked about what their top challenges are:
- 22% referenced accessing funding.
- 19% cited budgeting as a key problem
- 13% said they have trouble earning recurring revenue.
Apart from financial challenges, the most prominent pain points among our respondents were work-life balance (cited by 39% of those surveyed), scaling their businesses (cited by 20%), and recruiting and retaining talent (cited by 20%).
4. Most entrepreneurs see growing a customer base as the biggest opportunity they have in the next year.
Entrepreneurship is, in large part, the art of identifying and capitalizing on potential — and the most effective business owners keep an eye on what‘s to come. That’s why we asked our entrepreneurs what they see as the most compelling opportunities they see coming in the next year.
Here’s how they answered:
- 57% say growing their customer base.
- 29% say growing their team.
- 29% say increasing brand awareness.
- 23% say implementing new tech.
- 22% say sourcing financing or capital.
5. Most entrepreneurs in the startup stage say the first $100K is the hardest milestone to hit — but business owners beyond that generally say it’s $101k to $500k.
As Drake so eloquently put it, “The first million is the hardest.”
Real as that wisdom might be, the entrepreneurs we surveyed don’t necessarily see it that way. When we asked for their take on the hardest ARR milestone to hit, 68% of respondents whose businesses were in the startup stage said it was the first $100K.
However, business owners beyond the startup stage generally don’t see it that way:
- 30% of entrepreneurs in the “Growth, Expansion” stage agree with that sentiment.
- 28% in the “Mature/Steady” stage agree.
- 44% in the “Winding Down” stage say the same.
Most entrepreneurs who own more established businesses say that the hardest ARR milestone to hit is between $101k and $500k:
- 42% of entrepreneurs in the “Growth, Expansion” stage reference say that range is the hardest milestone to hit.
- 45% in the “Mature/Steady” stage agree.
- 44% in the “Winding Down” stage say the same.
These results aren’t too surprising, especially when it comes to how businesses at various stages conceive of the most challenging milestones. Businesses in the startup stage — struggling to get off the ground and starting to generate ARR — lack the kind of perspective their more established counterparts have.
Once they mature, they might find that the next $400k is trickier than the first $100k.
6. Entrepreneurs are taking high risks to raise capital.
Want to hear some bold, revolutionary wisdom that’s as shocking as it is enlightening? Entrepreneurship often involves risk.
Boom. You can pull yourself off the ground and stop hyperventilating now. That, right there, is the kind of revelatory insight you can only get here on the HubSpot Sales Blog. You’re welcome.
Seriously though, being an entrepreneur is a risky game — especially on the financial front, and our survey confirms that. Several business owners have a lot of skin in the game when it comes to sourcing funding for their businesses.
A whopping 74% of entrepreneurs use personal funds to support their businesses. 27% have business loans (such as SBAs). 19% are taking out credit card cash advances. 18% borrow or get donations from friends and family, and 14% seek funding from investors and private equity firms — and as much as you hear about crowdfunding nowadays, only 4% of our respondents actually use the method.
All told, this data points to a conclusion that probably won’t come as a surprise. It goes to show that entrepreneurship is an extremely personal pursuit that is largely supported by bootstrapping and personal financing efforts.
7. Most entrepreneurs are optimistic about the next 12 months.
As nerve-racking as entrepreneurship might be, we found that most business owners are relatively optimistic about what‘s to come. We asked our respondents where they see their businesses going in the next 12 months. Here’s how they answered:
- 37% believe they’ll see higher sales or ARR this year
- 23% expect a similar or steady ARR over the next 12 months
- 23% expect to secure new funding or investments
- Only 6% expect to downsize, cut budgets, or shut down entirely
8. Social media and word-of-mouth are the most popular marketing channels for entrepreneurs.
If our research is any indication, most entrepreneurs prefer to lean on scrappier, more grassroots brands of marketing to get the word out about their businesses. When asked to name their three favorite marketing channels, our respondents answered like this:
- 71% referenced social media.
- 61% referenced word-of-mouth.
- 32% referenced maintaining an active website and navigating SEO.
- 31% referenced email marketing.
- 21% referenced video marketing.
Those results make sense. Social media and word-of-mouth are two of the most accessible, straightforward marketing channels for businesses — and entrepreneurs working with limited resources leveraging the methods with the lowest barriers to entry shouldn’t come as too much of a surprise.
Entrepreneurship is constantly evolving. New challenges are constantly emerging, and every entrepreneur — whether they’re aspiring or established — needs a pulse on the trends that are shaping business ownership.
Hopefully, these key findings will help you (a future entrepreneur, current business owner, or other interested party) thrive in the modern entrepreneurial landscape.