Entrepreneurs Choose Lifestyle Over Money (6/1)

Entrepreneurs Choose Lifestyle Over Money

Jennifer Chasin wanted to be an at-home mom, so she quit her corporate employment six months ago and started ePR, Inc., a high-tech public relations firm based near New York City. "This freedom is priceless to me," insists Chasin. "I truly believe that when you do what you love, the money will come to you. Doing the job I love, from the comfort of my home, weighs more than any paycheck I could possibly get from any large corporation."

Chasin's feelings are quite common among today's entrepreneurs. In fact, a recent study indicates that money is not the main motivator for America's small business owners. Rather, the driving forces for going into business for oneself are based more on emotions. For example, strong personal desires for more freedom, independence, realizing one's potential, being happy, and providing family security are all cited as defining the "American Dream" by survey respondents. A mere 10 percent feel getting rich defines the dream.

The Louis Harris & Associates-GreenPoint Financial Corp. study, however, identifies significant hurdles and tradeoffs to achieving entrepreneurial success, such as lack of credit, less vacation and less sleep. The benefits, though, outweigh the negatives for many small business owners who value more quality time with family and better overall financial security. The study finds about one-third of self-employed entrepreneurs have an annual income of more than $75,000 and half earn $50,000 or more.

"It is important to the continued health of the nation's economy to understand what motivates them and what impedes them," says Alvin Puryear, Ph.D., professor of management at City University of New York and GreenPoint financial director. "As the data show: As America's entrepreneurs go, so goes its economic future."

An overwhelming majority of survey respondents say obtaining credit is the biggest challenge for the self-employed and perceive bias by financial institutions when it comes to making loans to start or expand a business. Figures from the Small Business Administration (SBA) support this perception, revealing 40 percent of entrepreneurs rely on personal credit cards for business financing. Though entrepreneurs often require credit to succeed, the report says they frequently fail to meet accepted standards of creditworthiness.

"That so many self-employed Americans feel that financial institutions discriminate against them is disturbing," says Puryear. "Particularly when one considers the very positive qualities associated with this sector and the substantial contribution they make to the health of the U.S. economy."

Indeed, America's self-employed and small business owners are a driving factor in the growth of the American economy, according to the SBA. Small businesses with fewer than 20 employees represent more than 90 percent of all U.S. employers. Further, more than half the nation's new jobs are created by businesses with five or less employees.

"Political leaders publicly applaud and, in fact, rely on the success and the potential of American entrepreneurs," Puryear says. "So the question is: Why do so many of the self-employed feel there is a bias against them when it comes to obtaining credit to start or expand their business or buy a home?" The answer, says Puryear, is the self-employed don't feel they're getting the consideration they deserve from this country's financial institutions and suggests the banking industry should take a closer look at not only how it may be under-serving this market but how it may be missing out on worthwhile opportunities to grow its own business.