Washington Watch

November 12, 2003

• NASE Poll Reports More Women Turning To Self-Employment in New Decade

• SBA Study Shows Modest Startup Costs for Most New Ventures

• IRS Releases 2004 Standard Mileage Rates; 800,000 More Businesses Eligible

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NASE Poll Reports More Women Turning To Self-Employment in
New Decade

Buffeted by a challenging economy, an uncertain job market and a heightened focus on home and family post 9-11, a new poll by the NASE shows that more women are turning to self-employment as a strategy for navigating life. The survey shows that start-ups of women-owned businesses have grown by double digits annually from 2000-2003, significantly outpacing growth in the 1990s and out-numbering men-owned start-ups by nearly a 2-to-1 ratio in 2003.

The poll shows that women increasingly are taking stock of the broader job market and economic climate and electing to set up shop – often at home – in pursuit of more control, greater independence and a better balance of work, family and community stewardship. Adding to the equation are technology advancements and accepted workplace trends that enable individuals to work virtually from any location or office configuration. The NASE conducted the survey last month among more than 1,000 self-employed Americans.

Despite a litany of challenges – topped off by the economy -- almost a third of women surveyed in the poll say they have started their businesses since 2001, and nearly 10 percent report they have launched their current enterprises this year. In contrast, 5.1 percent of businesses owned by male survey respondents were started in 2003.

According to the study, six in 10 women who are self-employed today have had to switch careers. Most say they are working harder to start and sustain their own ventures, but it is a trade-off they are happy to make to better accommodate the needs of their families as well as other interests. Chief motivators are more time with and focus on family, as well as greater flexibility in managing their households. Women business owners also say their independence enables them to be more involved in the community.

Women report self-employed income that is significantly lower than men’s. Average income for women surveyed is $38,640 versus $54,260 for men. Nearly 45 percent of women respondents report making an income of less than $25,000, while only 24.6 percent of men earn at this level. In contrast, more than one in four (26.1 percent) men surveyed report making $75,000 and up – twice the number of women who report reaching this income level.

At the same time, women entrepreneurs express greater commitment than men to sticking with their self-employment plan over the long haul, regardless of other attractive career opportunities that might come along. More than 25 percent (26.6 percent) of women surveyed say they would not consider closing their businesses even if another desirable job came their way. Only 17 percent of men are so solidly behind working for themselves.

For more statistics from the survey, including information on the number of part-time ventures, retirement expectations, income and contribution to society, visit the NASE Press Room.

 

SBA Study Shows Modest Startup Costs for Most Ventures

Entrepreneurs opening a business for the first time expect less startup costs than it would take to purchase a new car, according to a new study by the Office of Advocacy of the U.S. Small Business Administration. Solo entrepreneurs expect median startup costs of $6,000, and those establishing a business with one or more partners expect costs of $20,000. The study, Expected Costs of Startup Ventures, found that both solo and team entrepreneurs planned to cover these startup costs without bank loans.

The study also found optimism; on average, solo entrepreneurs believe they will have business income of $90,000 in the fifth year of their venture, while team ventures expect an income of $125,000 in the fifth year.

For more information and the complete text of the report, visit the Office of Advocacy Web site at www.sba.gov/advo.

 

IRS Releases 2004 Standard Mileage Rates; 800,000 More
Businesses Eligible

The Internal Revenue Service announced changes to the 2004 standard mileage rates for computing the deductible costs of operating an automobile for business purposes. Changes were also made to the number of vehicles that the same business owner can apply the standard mileage rates to, reducing record keeping burdens on small businesses.

The 2004 standard mileage rate increases to 37.5 cents a mile for all business miles driven, up from 36 cents in 2003. In addition, taxpayers who use more than 4 vehicles at a time for business purposes may use the standard mileage rate in 2004, instead of tracking the actual expense for each vehicle.

The IRS expects 800,000 more businesses to become eligible to use the standard mileage rate with these changes. The tax collection agency also anticipates the new rules to save small businesses 8-10 million hours a year in record keeping.

For more information on the standard mileage rate changes for businesses, visit www.irs.gov/newsroom.
 

Do any of these issues affect you? Visit the NASE Legislative Action Center and “Tell Your Micro-Business Story.” This will help the NASE understand - on a personal level - how key legislative issues are affecting your business and your bottom line.

For more information about any of the articles in Washington Watch, contact Maureen Petron, NASE public affairs manager, at (202) 466-2100 or mpetron@nase.org.

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