entrepreneurship in nebraska: findings from a gallup survey
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THE GALLUP ORGANIZATION
William WalstadUniversity of Nebraska-Lincoln
Entrepreneurship in Nebraska:Findings From a Gallup Survey
2Copyright © 2006 William Walstad
Credits
• The Gallup Organization
• Krieger Family Foundation
• Jim Krieger & Glenn Phelps for leadership
• Walstad & Kourilsky studies for most survey items
3Copyright © 2006 William Walstad
Sampling• General Public
2,460 Nebraskans 18 years of age or older
+/- 2% sampling error for state results
• Business Owners
555 Nebraska business owners with 1 to 100 employees
+/- 4.2% sampling error for state results
Survey conducted: Fall 2005
4Copyright © 2006 William Walstad
Survey Topics
1. Interest in Entrepreneurship (5)*
2. Views of Small Business (3)
3. Reasons to Start a Business (4)
4. Challenges and Obstacles (2)
5. Entrepreneurial Knowledge (4)
6. Preparation and Education (5)
7. Role of Government (4)
8. Economic Development (4)
*Number of items on topic
6Copyright © 2006 William Walstad
Want to Start Own Business
40%
9%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Yes Already own business
Total interest in entrepreneurship = 49%
General Public (n = 2,460)
7Copyright © 2006 William Walstad
Want to Start Own Business by Age
69%
55%
43%
17%
3%8%
13% 11%
0%
10%
20%
30%
40%
50%
60%
70%
80%
18-29 30-39 40-49 50+
Yes Already own business
Age
General Public (n = 2,460)
8Copyright © 2006 William Walstad
Age When Thought of Starting Own Business
67%
20%
10% 7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
5-29 years old 30-39 40-49 50+
Business Owners (n=555)
9Copyright © 2006 William Walstad
Number of Other Businesses Started
33%29%
22%
16%
0%
5%
10%
15%
20%
25%
30%
35%
None other thanthis one
1 2 3 or more
Business Owners (n=555)
10Copyright © 2006 William Walstad
Interest Findings
• Entrepreneurial interest is great. The pool of potential entrepreneurs is an untapped resource for Nebraska.
• Entrepreneurship begins early. Most of the general public business owners start thinking about it at a young age.
• Entrepreneurship is multiple process. Starting one business often leads to starting others.
• Entrepreneurship is viewed as a good career choice.
12Copyright © 2006 William Walstad
Years to Exit Business
28%
21%
11%
25%
0%
5%
10%
15%
20%
25%
30%
0-5 years 6-10 11-15 +15 Years
Business Owners (n=555)
13Copyright © 2006 William Walstad
Who to Transfer Business to
36%
11%
18%
27%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Family Employee(s) Third party Liquidate
Business Owners (n=555)
14Copyright © 2006 William Walstad
Development Findings
• There is a transition problem for business. Most owners plan to exit the business in ten years. Many owners plan to liquidate their business.
• Nebraskans generally give low ratings to the effectiveness of economic development in their communities.
16Copyright © 2006 William Walstad
Challenges to Starting a Business
61%
62%
69%
79%
0% 20% 40% 60% 80% 100%
Competing withother businesses
Get loans/finance
Developing sales
Government redtape & regulation
BusinessOwners(n=555)
17Copyright © 2006 William Walstad
Government Regulation of Business
21%
5%
73%
27%
8%
61%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Right Amount
Too little
Too much
General Public (n=2,460)
Business Owners (n=555)
18Copyright © 2006 William Walstad
Business Taxes
42%
15%
37%
64%
7%
26%
0%
10%
20%
30%
40%
50%
60%
70%
Overtaxed Undertaxed Right Amount
General Public (n=2,460) Business Owners (n=555)
19Copyright © 2006 William Walstad
Government Findings
• Business owners, more so than the general public, think there is too much government regulation and taxes.
• Both business owners and the general public think government should provide more tax incentives for people to start new businesses.
21Copyright © 2006 William Walstad
Major Reasons to Start a Business
6%
8%
9%
13%
50%
18%
13%
6%
7%
46%
0% 10% 20% 30% 40% 50% 60%
To earn lots of money
To use skills
Help community
For the family
To be my own boss
General Public (n=1,208)*
Business Owners (n=555)
*Yes to entrepreneurship
22Copyright © 2006 William Walstad
Major Reasons Not to Start a Business
6%
8%
24%
39%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
It is too risky
No money
Lack skills, ideas, etc
Age
General Public (n=1,244)
“No” to entrepreneurship
23Copyright © 2006 William Walstad
Reasons Findings
• The prime reason people become entrepreneurs is the need for independence, and not to make lots of money.
• After age, the prime reason people do not become entrepreneurs is they lack something, which in many cases can be changed with more education and preparation.
25Copyright © 2006 William Walstad
Importance for Starting a Business
28
35
38
20
21
20
0 10 20 30 40 50 60 70
College
High School
Work Experience
Very Important Important
Business Owners (n=555)
Numbers shown in percentages
26Copyright © 2006 William Walstad
Importance of High School Factors for Starting a Business
Business Owners (n=555)
21
24
19
20
0 5 10 15 20 25 30 35 40 45 50
Business &Entrepreneurship
Classes
A key teacher orteachers
Very Important Important
27Copyright © 2006 William Walstad
Importance of College Factors For Starting a Business
19
21
20
35
0 10 20 30 40 50 60
A key professor orprofessors
Classes that taughtbusiness or
entrepreneurship
Very Important Important
Business Owners (n=368)
28Copyright © 2006 William Walstad
Education Findings
• Work experience and education are prime factors for preparing people for entrepreneurship.
• Education, both in high school and college, are important factors for to entrepreneurship.
• The general public strong support more entrepreneurship education in the schools.
30Copyright © 2006 William Walstad
Contribution Business Owners Make to the Community
9%
80%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Philanthropic
Economic
General Public (n=2,460)
31Copyright © 2006 William Walstad
Importance of Business Owners Contributing to a Community
29%
54%
0%
10%
20%
30%
40%
50%
60%
Important Very Important
General Public (n=2,460)
32Copyright © 2006 William Walstad
Views Findings
• Nebraskans have a positive opinion of small business: its economic opportunities, services, and philanthrophy.
• Nebraskans think it is important for successful business owners to contribute more to a community than just jobs or taxes.
33Copyright © 2006 William Walstad
Conclusion
• There is great potential for expansion of entrepreneurship in Nebraska, especially among young adults.
• The state needs to find creative ways to tap that potential through education, incentives, and community support.
• Nebraska will benefit from the multiple contributions entrepreneurship makes to economic growth, jobs creation, and philanthropy.
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