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Microentrepreneurs’ Financial Realities, Pain Points, and Aspirations

Microentrepreneurs struggle to balance personal finances and business goals, These challenges create opportunities for the financial health and social sectors to support their ambitions and goals.

  • SaverLife

Untangling the Personal and Professional

This work was generously supported and funded by Wells Fargo Foundation.

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 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.

How to support microentrepreneurs at every stage of their savings journey

Microentrepreneurs often struggle to balance personal finances and business goals, but these challenges create opportunities for the financial health and social sectors to support their ambitions and dreams.”

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From the stories, survey feedback, and transactional data of SaverLife’s growing microentrepreneur membership, we learned that:

  1. Personal finances are further constrained by lack of access to the right business financial products.
  2. Tax benefits are elusive for some microentrepreneurs living with low-to-moderate incomes.
  3. Black entrepreneurs are especially well positioned to benefit from greater access to business management tools and technology.
  4. Current loan product offerings are keeping women entrepreneurs from leveraging mainstream financial institutions.
I’m still looking for grants and any financial help, because righ tnow I’m doing it out of pocket and with the funds that I earned.
SaverLife member (NM)

Of SaverLife microentrepreneurs surveyed…

68%

Agree a lack of personal savings is making it hard to save and grow their ventures

63%

Are struggling to save enough money to start and grow their business ventures

65%

Are struggling to find financing because their credit score is low

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.

I would benefit from free assitance: being able to speak with someone like ‘what can we put together?’ But putting al lthe pieces together is kind of difficult for me.
Saverlife member (tx)

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.

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