Despite Continued Economic Turmoil, Entrepreneurial Firms Continue to Grow

Article by:
EO Global

Alexandria, Virginia, USA (29 January 2013) – The Entrepreneurs’ Organization (EO) has released the latest results from its Global Entrepreneur Indicator research project, a twice-yearly survey of business owners from around the world. The survey focuses in part on performance-related metrics, such as jobs, profits and debt loads. The other factors the survey explores are related to the business climate, such as access to capital, predictions on the economy and even entrepreneurs’ proclivity to start a new business.

The survey, conducted throughout the month of November, ended with a sample of more than 2,750 entrepreneurs around the world, whose businesses average US$18.3 million in annual revenue and 192 employees.
A snapshot of the survey findings includes:

Jobs:Globally, entrepreneurs are creating jobs at a rate that far outpaces job losses, though the rate of growth has slowed during the past two years.

  • After hitting a low of 42% in June 2010, a healthy number of entrepreneurs have been adding jobs during the past two years, ranging from 56% to 59%, depending on the survey period.
  • Only 12% of entrepreneurial firms have decreased headcount during the past six months, with the remaining 32% holding steady.
  • 62% of entrepreneurs expect to create new jobs in the coming six months.

Business environment: Entrepreneurs are much more positive about the current business environment than they were as recently as one year ago, though numbers have been tempered by the economic and political volatility in certain regions.

  • Globally, there is a fairly even distribution between those who expect the economy to improve (35%), remain the same (38%) and deteriorate (27%).
  • Recent economic and political news is reflected in certain regions’ pessimism, as both Europe/Middle East and the United States are less optimistic than their global peers.
  • After a dramatic decline in 2010 and 2011, the number of entrepreneurs who expressed willingness to start a new venture has held steady at roughly four in five for the past year.
  • In every region, the number of entrepreneurs who said it has become easier to access capital than said it has become harder was larger by a factor of at least two.

Revenue and profit:The percentage of entrepreneurial firms experiencing profit increases has held steady at roughly 60% for the past 2.5 years. Revenues are up across the board and, as one would expect, are tied closely to profitability.

  • Those who reported increasing profits outnumbered those who reported falling profits by more than three to one (59% to 19%).
  • Nearly three-quarters (73%) of business owners expect profit margins to increase in the coming six months.
  • 65% of business owners reported an increase in revenue during the past six months, ranging from a high of 70% (Canada) to a low of 57% (Europe/Middle East).
  • 78% of entrepreneurs predict that their firms will experience an increase in revenue in the coming six months.

To learn more about the Global Entrepreneur Indicator, and to read the full reports, visit www.entrepreneurindicator.com. ​​

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