A recent report, published in November 2014 by Intuit (www.intuit.com), in partnership with Decipher Market Research, based on a survey of 500 small business owners that was designed to uncover common challenges that small businesses in the U.S. face as they start and grow, noted that a large percentage of small business owners struggle with financial literacy. The survey consisted of 34 percent of respondents who were one-person operations, 52 percent who had two to 10 employees, and 14 percent who had 11 to 50 employees.
The survey found that, while 59 percent of respondents considered themselves "completely" or "very" financially literate, 41 percent considered themselves only "somewhat" or "not very" financially literate.
Interestingly, the majority of the respondents were not young, uneducated, inexperienced business owners. Just over half (51 percent) were 45 years or older, 36 percent were 30 to 44, and only 13 percent were 18 to 29. In addition, 57 percent had a college or post-college degree, while 30 percent had some college, and only 12 percent had only a high school diploma. Just over half (51 percent) had been in business more than three years, 33 percent had been in business one to three years, and only 16 percent had been in business one year or less.
Recommended For You
Why the lack of financial literacy among so many mature, educated and experienced business owners? "Small business owners and entrepreneurs are the engine of growth and the backbone of the economy," said Terry Hicks, vice president and general manager, QuickBooks Online, at Intuit. "But most of them don't choose to become their own boss because they love balancing the books. They go to work every day because they have an idea, seize the potential, and use an uncompromising drive to get the job done."
Despite their reported lack of financial literacy, respondents consider financial literacy important. Almost three-fourths (73 percent) said they considered that understanding finances has an "extreme impact" or "big impact" on the way they run their businesses. In addition, 66 percent reported that they wished they knew more about their finances.
Still, 58 percent had never taken courses outside of normal schooling to improve their understanding of their business' finances, 39 percent do not follow financial news, and 35 percent do not use financial statements in their businesses.
Despite their reported lack of comprehensive financial knowledge of, and financial expertise in, their businesses, 81 percent of respondents stated that they handle part or all of their business finances themselves, 20 percent outsource part or all of it, and six percent seek help from friends or family. Sixty-one percent reported that they use on-line tools to manage their finances.
The survey also found that only 38 percent of respondents think that their employees understand their business' finances "completely" or "very well."
Overall, though, most respondents prefer to play things financially "close to the vest." Only 28 percent of respondents reported being in debt, and 69 percent said they have never taken a loan for their small businesses.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
