Untangling the Personal and Professional: Microentrepreneurs' Financial Realities, Pain Points, and Aspirations
Entrepreneurship has historically been viewed as a pathway to economic opportunity and social mobility. While this remains true for many, more and more Americans are becoming entrepreneurs out of necessity.
In Spring 2022, SaverLife, with the support of the Wells Fargo Foundation, launched a comprehensive marketing and outreach campaign to learn more about the self-employed. In particular, we wanted to better understand the aspirations and pain points of microentrepreneurs: individuals who start a side hustle, launch a small business, or take on gig work to cover some or all of their income through self-employment.
From the stories, survey feedback, and transactional data of SaverLife’s growing microentrepreneur membership, we learned that:
Personal finances are further constrained by lack of access to the right business financial products.
Tax benefits are elusive for some microentrepreneurs living with low-to-moderate incomes.
Black entrepreneurs are especially well positioned to benefit from greater access to business management tools and technology.
Current loan product offerings are keeping women entrepreneurs from leveraging mainstream financial institutions.
Microentrepreneurs Deserve a Clear Path to Prosperity
Microentrepreneurs face many challenges while navigating the intersection of their personal finances and business goals. However, these challenges present a unique opportunity for the financial health and social sectors to recognize the ambition, goals, and dreams of microentrepreneurs and help make them possible.
To support microentrepreneurs at every stage of their savings journeys, SaverLife recommends:
Encouraging all microentrepreneurs to think of their businesses as businesses.
Reducing friction between personal and business finances by encouraging all microentrepreneurs to track revenue and expenses and reduce the intermingling of personal and business accounts.
Supporting microentrepreneurs in maximizing tax benefits.
Improving access to financial and business products for microentrepreneurs.
Expanding financing and capital options so microentrepreneurs can achieve their self-employment aspirations.
Interested in partnering with SaverLife on a research project? Contact Tim Lucas at tim@saverlife.org for more information.
