Control. Flexibility. The ability to play out a hunch or follow a dream. Small business owners reap great non-monetary rewards by being their own bosses. But they’re well aware of the trade-offs: variable income, long hours, strained work/life balance and more. Here’s a look at the life of a North American small business owner in 2012.

For all the stresses of running a business, an amazing 86% of small business owners love what they do for a living, and 82% say the rewards far outweigh the challenges. They’re committed to their path, too, with 56% answering “Never!” to the question: “Would you ever go back to working for someone else?”

That’s likely due in part to their independent spirit: The most common reason for going into business for themselves is “being the boss/the decision maker,” a factor shared by 57% of respondents.

Does a bad economy drive entrepreneurship? 15% of small business owners said they launched their own endeavor after finding themselves unemployed and unable to find work. More significantly, for businesses launched more than 6 years ago (pre-recession) only 9% pointed to unemployment as a factor; for businesses started in the last 12 months, that number doubles to 18%.

Responses seem to suggest that government efforts to encourage small businesses are falling flat: Only 2% of respondents said government incentives fed the decision to go into business for themselves.

A full 50% of respondents underestimated just how hard being their own boss could be. Luckily, only 4% of them would have abandoned their plans to go into business if they had known the difficulties in advance.

What are the most common challenges faced by small business owners in 2012? The combination of time management and work/life balance takes top spot, with two thirds (66%) of business owners struggling in one or both of these arenas. 43% of Wave logins, for instance, take place outside of traditional business hours (i.e., from 6 p.m. through the overnight hours to 9 a.m.), and 1 in 5 logins take place over the weekend, suggesting that many small business owners put off administrative tasks like accounting and bookkeeping until after the revenue-generating workday ends.

The life of a small business owner

2Infographics and additional report details available at waveaccounting.com/small-business

Wave Small Business Report, Summer 2012

Cloudy past, sunny future — mostly

Just how bad has the last year been for small businesses? Nearly half (48%) of respondents said their business didn’t earn enough for their families’ needs. Cost of doing business (38%) and changes in customer spending (30%) as well as competition (27%) were the most commonly cited challenges in the past year.

“ “I didn’t realize how much government red tape takes away my profits.A Wave customer, on the not-so-good surprises of owning a small business“ “ My clients

have become more than just clients—they’ve become friends.A Wave customer, on the good surprises of owning a small business

3Infographics and additional report details available at waveaccounting.com/small-business

Wave Small Business Report, Summer 2012

Nonetheless, only 23% were dissatisfied with their business’s performance in the last year, suggesting business owners had a realistic expectation of what the economic climate had in store.

More than three quarters of those surveyed said their businesses at least met (37%) if not exceeded (40%) their expectations in the last 12 months.

As for the future, business owners appear to believe either that the economic recovery is underway, or that they have what it takes to overcome current obstacles. Four out of

5 respondents see a bright future for their business. 66% of owners consider their businesses to be in a growth phase, and encouragingly only 8% think their businesses are in decline.

Many small businesses have aggressive plans, with nearly three quarters (73%) planning on expanding their product offerings or initiating new marketing campaigns in the year to come.

Small businesses will continue to be drivers of new employment. A quarter of the businesses surveyed see themselves hiring additional employees in the coming year.

North American small business owners are also twice as likely to outsource work locally than they are to send work overseas (18% vs. 9%) in the near future.

Canadian pragmatism vs. American optimism?

No surprise here, Canadian and American small business owners generally think and act the same. They both love what they do for a living (85% in Canada vs. 86% in the U.S.). And being their own boss is the number one motivator for both groups.

4Infographics and additional report details available at waveaccounting.com/small-business

Wave Small Business Report, Summer 2012

That’s not to say that they endure the same business conditions. The recession hit U.S. small businesses harder: 34% of American business owners think the sluggish economy is a problem for them, vs. 21% of Canadian business owners.

Though U.S. businesses had a tougher time in the recent past, they also see the future through rosier glasses. In fact, for every measure of optimism and pessimism on which they didn’t score the same, American business owners were more extreme in their assessments than Canadians, pointing to higher highs and lower lows.

Among U.S. respondents, 47% strongly agree that they see a bright future for their own company. Canadians are more muted, coming in at 38%. At the same time, 43% of Americans think the next 12 months will be harder for small businesses in general; only 34% of Canadians felt that way.

When asked to rate their business’s performance over the last 12 months, U.S. business owners were much more likely to give themselves a 9 or 10 out of 10. Americans did so at a rate of 20%, vs. 14% in Canada. We asked business owners whether they were able to earn enough in the last 12 months to meet their families’ needs. In Canada, 38% did not — a number well short of the U.S. figure of 52%.

*METHODOLOGYThis report was compiled with information from two sources: data analysis from Wave Accounting, and a survey. To ensure privacy, Wave data consisted of aggregate information only with no personally identifiable details. The survey was conducted online with Wave customers, between April 17 and April 30, 2012. The final sample size was 1,386, resulting in a margin of error of +/-2.6%, 19 times out of 20.