Ninety-four percent of independent workers love the control that independence provides, but 67 percent say their top concern has to do with inconsistent income in their micro businesses.
This is according to a recent survey of more than 600 independent workers conducted by the folks behind Invoice2go, an invoice app that allows small businesses to create and send professional invoices from any device.
The survey was conducted online in the U.S. on April 15, 2016, and it focused on independent workers who self-identify as a “contractor,” “freelancer,” “side gigger” or “micro-business.”
It’s interesting to see how the independent workers who responded to the survey identify themselves:
- Freelancer (21 percent)
- Contractor (16 percent)
- Side gigger (8 percent)
- Microbusiness (54 percent)
According to the survey, 93 percent say working independently gives them greater control over their career path and earning potential than working for an employer. The upsides of such control far outweigh their top concern over inconsistent income.
Support For Micro Businesses Needed
Nevertheless, 85 percent agreed current small business programs aren’t a good fit for micro businesses, defined here as having five or fewer workers. The survey showed small business owners in this category feel more resources and support for micro businesses are needed to help them flourish, such as better access to health care and protection from lost income.
Micro Businesses Fuel a New Economic Reality
The Association for Enterprise Opportunity (AEO) says that businesses with five or fewer people represent 92 percent of the country’s total businesses. Despite their prominence and huge economic impact, institutional support does not match up with the unique needs of this substantial segment.
“The punch line here is that work and income opportunities have evolved, but current programs designed for small businesses aren’t serving the needs of the micro businesses, a rapidly growing category,” Greg Waldorf, CEO of Invoice2go, explained in the company blog announcing the survey.
“Nearly 40 percent of our respondents left traditional work to strike out on their own, and we estimate more than 80 percent of all Invoice2go users have less than five workers, with plans to remain that way,” he said.
A national debate is ongoing about labor practices and new business models that connect independent contractors and the smallest of service providers in the country directly with consumers.
On the one side are those who believe freelancers and “gig” workers should be offered workplace benefits and protections equivalent to full-time employees. On the other side are those who contend that workers who choose independence should accept that it comes with no obligation for companies to supply these benefits.
More Support For Micro Businesses
Invoice2go says it is backing the call for more benefits offered to micro businesses matching that of full-time employees to support this type of entrepreneurial spirit. It says it hopes the government will begin to take note and to support the specific needs of the smallest of businesses.
“Invoice2go deliberately focuses on delivering tools for the smallest of businesses; those that are resource strapped and don’t have the time, inclination or need for a lot of unnecessary software features irrelevant to their work,” Waldorf told Small Business Trends in an email interview.
Waldorf went on to give an example of how his company helps micro businesses.
“Our invoicing app enables micro business owners to generate estimates, invoice their customers the instant a job is complete and immediately accept payment from their mobile device. Using our Apple Watch app, they benefit from automated geo-location time tracking. We hear from our customers how valuable and cost effective our focused approach is and hope that this data encourages other service providers to cater more to this growing community of micro businesses,” he concluded.
Meeting the Unique Needs of Micro Businesses
When asked to specify “what kind of additional support would help,” the majority of survey respondents said “the ability to purchase better health insurance” and “better tax incentives.” Other respondents made a plea for “business training,” “help managing cash flow,” “access to legal help” and “better retirement plans.”
While small business programs like the Small Business Jobs Act of 2010 and ScaleUp America Initiative have provided pivotal support, respondents said these tend to focus on provisions for traditional SMBs, bigger ‘small’ businesses that typically have up to 500 employees, and in some cases up to 1,500. These larger SMBs scoop up all the benefits, such as loans and training for expansion.
Organizations like the Freelancers Union have taken note of the discrepancy and have jumped in to support programs benefiting the new type of independent workers. Today’s independent workers and very small businesses are unique and programs to support them seem to be lacking, the organization says.
As a result, the Freelancers Union has launched a campaign to award freelancers more rights in collecting payment for work, a key issue for them. A free membership to the Union will also give micro businesses access to resources like contract templates, guidance on benefits and discounts on numerous services.
Image: 2go.com
This article, "Micro Businesses Love Independence, Worry about Cash Flow [Survey]" was first published on Small Business Trends
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