Small business survey reveals owners' biggest startup concerns

Compliance is ongoing

Compliance can easily become an afterthought once attention shifts to the day-to-day demands of operating a business, including managing cash flow, overseeing employees and logistics, and developing customer relationships.

For LLCs and corporations, ongoing compliance includes filing annual reports and franchise taxes on time, maintaining a registered agent, and periodically renewing licenses and permits. If the business is registered in other states, those states come with their own compliance requirements as well. Corporations also have additional obligations, such as holding annual shareholder meetings, recording formal minutes, and keeping written resolutions on file for major decisions.

Just over half of respondents (51%) rejected the idea that business formation involves only a one-time filing, indicating that they understood compliance requirements continue after formation. Of those respondents, 32% completely disagreed and 19% somewhat disagreed with the statement.

Administrative and financial tasks take more time than expected

Starting a business is often driven by passion and a great idea, but the reality of keeping it running comes with a different set of demands. Many new owners quickly discover that the tasks eating up the most time aren't the ones they signed up for. Our survey asked business owners what proved harder than expected in their first year, and the responses point to a clear pattern. Administrative and financial upkeep, not the core work of the business itself, is what new owners struggle with most.

When asked what took more effort than expected in their first year, respondents put accounting and bookkeeping at the top, selected by 32%. One respondent described the challenge this way: “I underestimated the amount of time needed to track and document financial transactions relating to my LLC.”

Marketing followed closely behind, selected by 31% of respondents, with paying taxes at 20% and pricing products or services appropriately at 19%. The responses show that the tasks required to keep a business compliant and organized often demand far more time than new owners expect, pulling them away from the core reasons they started their business in the first place.

Business owners seek guidance

There's no shortage of information available to new business owners. But instead of being helpful, this often leads to confusion, distraction, and frustration. With so much information out there, business owners can find themselves spending more time trying to process it all than actually applying it correctly to their business.

When it comes to compliance information, business owners are seeking direct, actionable guidance. When asked which resources would have helped them most in ensuring their business stayed compliant, 47% of the respondents chose a step-by-step guide for the business formation process. Guidance from an accountant or lawyer followed closely at 39%, while 22% selected guidance from a peer, friend, or mentor.

AI falls short on compliance

Many new business owners now use AI to research how to start a business. While a good number (42%) felt they received clear advice on how to start a business in general, many felt that it wasn’t enough.

When asked whether AI gave them a complete picture of the legal and compliance steps required to form their business, 47% found that it did not, with 38% saying it absolutely did not give them a complete picture.

Conclusion

The survey shows that entrepreneurs are concerned about legal and compliance requirements when starting a business, yet many still underestimate the ongoing administrative responsibilities that follow formation. Planning for recurring filings, financial recordkeeping, taxes, marketing, and other operational demands can help owners prepare for the work required to keep a business organized and compliant as it grows.