It’s National Small Business Week! I’ve been soaking up the new research studies and Census trend reports. One that stood out: a collaboration between Gallup, JP Morgan Chase, and The Ewing Marion Kauffman Foundation called “Entrepreneurial Insights: Owning and Employing as a Pathway to Wealth and Wellbeing.” 

It’s been well-established that the majority of entrepreneurs start businesses to improve their financial security. This survey goes to the next level: who’s thriving? How do you actually build wealth? The survey considers historical household wealth, educational attainment, and gender and racial identity.  

The biggest takeaway for me was that having employees is a significant advantage in wealth and wellbeing. Owner-employers experience the highest sense of well-being (+19%) over non-employers and self-employed and earn 5x the median income. Only 9% of business owners have employees, and this skews to white males. Conversely, those who are self-employed rated the lowest on “thriving,” even below employees.

Now, plenty of you have designed the life you want through self-employment. And maybe you tried having employees and hated it. That’s all fine; you know what works for you. If you’re on the fence of whether to bring on a team, this study may give you a nudge, especially if you eventually want a high-value exit.

Another key finding that I loved is that business owners with better management practices grew revenues by 40% versus 10% for those without those skills. There was no difference in management quality or attainment by level of education, gender, or race. Which is great news! You’re reading this newsletter, so you’re already improving your management practices. You are very likely to experience more growth in your business by enhancing your ability to run a company, set goals, understand profit, revenue, and taxes, and oversee working relationships. These are all skills you can learn, no matter who you are or where you started. If you want some direction on where to start, book 20 minutes to talk with me.

And finally, legacy. I was not surprised to see that children with a parent who is an entrepreneur are twice as likely to start a company. I’m often asked about how I ended up as an entrepreneur. Both sets of my grandparents had businesses, as did my mom. I spent my summers making hot fudge sundaes and cashing out customers at the antique manual cash register in my grandparents’ drug store. I started babysitting when I was 9. I worked at five tech start-ups and spent years considering what kind of business to start. It wasn’t that scary. If you want your kids to be entrepreneurs, talk to them about your business. It’s a perfect time of year to consider bringing them in for a summer job.

I skipped over some head-slapping findings about access to capital, which unfortunately will not surprise you. The full 56-page study is chock full of data on entrepreneurial wealth and wellbeing, factors in small business growth, and the impacts of discrimination. Download a copy here.

A busy week in Washington

What is franchising, anyway? 

Several federal changes that flew under the radar last week. 

Death of noncompetes: the FTC ruled that nearly all noncompete language with employees is invalid, effective immediately. (See a summary here from my employment law firm.) The ruling exempts those making more than about $153,000 per year in senior policy-making roles. Legacy noncompete language for departed employees remains in force, and you can still have noncompetes with contractors. If you are concerned about trade secrets and IP, update your employment agreements with those specific clauses. The US Chamber of Commerce has appealed the ruling.

Airline refunds: beginning in six months, airlines will be required to fully refund you for certain delays, flight changes, cancellations, and rerouting. The ruling also covers the speed at which your lost luggage must be found and returned. No more fighting for vouchers or credits.  

New overtime rules: effective July 1, the Department of Labor will increase the federal minimum exempt salary to $43,888, or $844 a week. Click the link to verify that you’re complying with updated FLSA rules for overtime. If your local rules require higher minimum exempt salaries, those still take precedence.

Net neutrality is back: the FCC has officially reinstated net neutrality, the idea that the people who provide your internet can’t slow down or block what you want to access from your home or business based on it coming from a competitor. Get ready for less Netflix stuck at 24%.

Mistakes happen: Did you make an error on your tax return? You can quickly amend just the part that’s wrong, without refiling. The IRS has made a handy YouTube video explaining the process.  

Supercycle: Futurist Amy Webb’s annual presentation at SXSW had people waiting in line for hours. For the rest of us, she recapped it this week on Brene Brown’s podcast, explaining how AI, wearables, and biotechnology are converging into a supercycle of change. If you want to go deep, review her company’s 2024 Trends Report. 

Man money: I tried to avoid it, but this headline has been showing up all over my feeds and podcasts: “Want to get rich? Target bored young men.” New studies on gambling and risk-taking behavior suggest that  young men who want to get rich are the easiest targets for others who want to make a lot of money.  Without the responsibilities of families and homes, younger men are more likely to aim their attention and extra cash toward the dopamine hit of crypto, sports betting, gambling, and trading apps.