Do Small Business Owners Have More Fun?

Do you have fun running your business? Research from The Guardian Life Small Business Research Institute shows it’s more likely if you stay small. Some keep their business small by choice, finding it more personally rewarding than running a bigger company with more employees.

Would you be surprised to hear that smaller businesses are also more productive? Businesses of 2-9 employees tend to revolve around the owner and typically generate far higher revenues per employee than ones with 50-99 employees – between 100% and 400% higher on average, according to The Guardian Life report, “Small Business Trends as Companies Grow in Size”.

This analysis of small business owners’ mindset by employee size was based on the Institute’s study of “What Matters Most to America’s Small Business Owners”, published in 2009.

Both reports are excellent.

In fact, they are the first effective encapsulation of the attitudes and values of small business owners and how they change as the business grows, that I have read.

The points apply equally to Canadian small business owners. So think [North] America.

What matters most to America’s small business owners

Small business owners are committed to staying in business for the long haul. First on their priority list are customers, second are employees and third is “ME”. Money is way down the list.

Respondents applied a 21-point scale (from +10 to -10). The Institute notes that positive intensity numbers above 3 are highly significant and indicate strong feelings. Their top 15:

1. Customers who appreciate what we do (5.8
2. Keeping the customers we have from leaving (5.6)
3. My employees (5.5)
4. Freedom (5.3)
5. Keeping customers happy (5.2)
6. Whatever matters most to our customers is what matters most to me (5)
7. Being able to make my own decision (4.9)
8. Finding some way to be noticeably different from competitors (4.9)
9. Quality of my staff (4.7)
10. Setting my business apart from our competitors (4.7)
11. Figuring out ways to take advantage of any economic condition (4.7)
12. Creating a positive working environment for all (4.6)
13. Giving our employees reasons to feel better about being part of our team (4.3)
14. Being able to have the satisfaction of creating something of value (4.3)
15. Doing something for a living that I love to do (4.2)

Exploring small business owners’ mindset by employee size

The Institute has found sharp differences in what matters most to small business owners as their companies evolve from very small entities to sizeable enterprises.

Among the compelling findings in “Small Business Trends as Companies Grow in Size” are that “personal freedom” and “maintaining work-life balance” – often key reasons why someone buys a small business – decline as the business grows larger. On the other hand, “creating opportunities for others” – an unexpected pleasure of running a growing small business – increases.

In their analysis, the Institute segmented and defined four types of small businesses based on the number of employees:

Maintaining productivity becomes increasingly difficult for small business owners as the size of their company grows. As mentioned earlier, businesses of 2-9 employees typically generate between 100% and 400% higher revenues on average per employee than ones with 50-99 employees.

At the same time, expanding the business becomes a more dominant focus of small business owners at larger firms. Among owners of companies with 50-99 employees, 53 percent say they are planning to expand their small business. However, at the other end of the spectrum, 58 percent of small business owners of companies with fewer than ten employees say they are happy just to maintain business as usual.

Based on their research, the Institute concludes:

As a small business grows larger:

Your thoughts? Where is your focus? Where do you fit?

FAQs 

Are small business owners happier than those who run larger companies? 

Research from The Guardian Life Small Business Research Institute suggests that small business owners, particularly those with fewer than 10 employees, tend to report higher levels of personal freedom and work-life satisfaction than owners of larger small businesses. As companies grow, owners often sacrifice the independence and flexibility that originally motivated them to start or acquire a business in the first place. 

Are smaller businesses more productive than larger ones? 

Yes, according to Guardian Life’s research, businesses with 2 to 9 employees typically generate between 100% and 400% more revenue per employee than businesses with 50 to 99 employees. This productivity advantage is largely attributed to direct owner involvement, a tight-knit team culture, and the absence of the organizational bureaucracy that tends to slow larger operations down. 

What matters most to small business owners? 

According to the research, small business owners consistently prioritize customers and employees above profits and personal income. Their top concerns include customer retention and satisfaction, employee well-being, personal freedom, and the ability to clearly differentiate from competitors. Money ranks notably lower on their priority scale than most observers would expect, revealing a strong values-driven motivation behind small business ownership. 

How does business growth affect what small business owners care about? 

As small businesses grow, owner priorities shift from personal independence and customer relationships to team management, employee development, and organizational structure. Larger small businesses require more formal management practices, greater reliance on professional advisors, and an intensifying focus on productivity and innovation, all of which can reduce the personal fulfillment that smaller, owner-operated businesses naturally provide.