Being your boss sure comes with its advantages. So, there has been a considerable increase in the number of entrepreneurs all over the world.
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In 2016 alone, 25 million Americans were either starting or already managing their businesses. Entrepreneurs tend to start their businesses small, and this has a positive effect on the country, entrepreneur statistics reveal.
New businesses often come with innovation and a new perspective that older businesses do not have. Plus, they have a sizable contribution to the economy, which can lead to the creation of new jobs for a lot of people with more investment opportunities.
Unfortunately, there are many misunderstandings and misconceptions about being an entrepreneur. So, we called the latest stats and facts to tell readers all about entrepreneurs and what they go through.
Important Statistics on Entrepreneurs (Editor’s Choice)
- 70% of companies in the US fail after 10 years.
- Entrepreneurs are 125x more successful if they start their business within the same field they have experience in.
- 92% of small business start-ups believe a website is important for their marketing.
- The number of women in entrepreneurship increased by 114% in 10 years.
- Each month, approximately 543,000 new businesses are launched.
- Capital is the greatest problem for about 33% of new entrepreneurs.
1. The US is number 1 on the Global Enterprise and Development Index (GEDI)
GEDI collects information on various entrepreneurial factors in several different countries. The data collected is then measured against the economic and social structures of a country, and a score is given. According to these entrepreneurship statistics, the United States provides the most suitable environment for growing entrepreneurs. As of 2018, the US was placed as number one from about 137 companies that are on the list of the Global Enterprise and Development Index (GEDI) with a GEI rating of 83.6.
2. Entrepreneurship involves long hours, with more than 35% of them working up to 40 hours a week.
This shows the amount of dedication and hard work you need to put in to become a successful entrepreneur. These long hours also sometimes include weekends because entrepreneur statistics show that about 17.7% claim they’re working every weekend.
Also, up to 31% of entrepreneurs say they work up to 50 hours a week, and 11.8% work 60 hours a week. Working longer hours also means many business owners will have to skip some important holidays and events. Approximately 37.9% of them say they have missed a social or family event due to work a minimum of a few times a year.
3. Entrepreneurs are 125x more successful if they start their business within the same field they have experience in.
While training may not count as a big factor, experience definitely is. Entrepreneurship statistics show that entrepreneurs have a higher probability of succeeding if they have had previous experience in the industry. For a lot of reasons, this can be accurate, the most obvious being interactions and relationships. A more experienced candidate will not make the same mistakes a novice would when they start the business. There is also a greater chance of adding value for clients and consumers.
4. The average amount of short-term loans for small businesses is $20,000.
A loan can be an important factor for entrepreneurs – especially when they are only just starting. They need to know the types of loans available to them and the ones that will suit their business model. Compared to medium-term loans, short-term loans are smaller.
Short-term loans are more readily available than long-term loans, and they are better suited to smaller one-off projects. Entrepreneur statistics show the average amount of short-term loans given to small businesses is about $20,000. The average credit line is $22,000. Many small businesses also apply to traditional banks for loans.
5. 62% of adults believe being an entrepreneur is a commendable career path.
There is a growing awareness among people around the world of the benefits of entrepreneurship. According to the entrepreneur statistics 2019, a considerable number of people think it would be a beneficial move for their career if they decide to become their own boss.
That being said:
There are also some misunderstandings about what it entails because about 40% of the respondents think it’s simple for people to start their own business. Also, 49% of the responders think they’re capable of doing it. Understandably, people will need to obtain more information about being an entrepreneur and what it entails. Hence, the need for more information.
Entrepreneurship and Growth
6. 55% of small companies have plans to get a website in the next 2 years.
Although many of the smallest companies in the world still need to create a website, over half of them intend to start a website within the next couple of years. Already, one in five has taken the first step by registering a domain name.
Business trends show there are approximately 200 million small businesses worldwide. The shift to their online presence could have a major impact on their growth. An online presence can also help their operations and ability to reach beyond their local customers. Besides growth, competition is a key motivator for creating a website: 83% of entrepreneurs who already own a website feel that they have a competitive advantage.
7. 92% of small business startups believe a website is important for their marketing.
On the road to becoming a major entrepreneur, it is important to market your new company. 89% of companies feel SEO also helps in marketing, while an even higher percentage (92%) believe a website is important. Combining these two factors, which means creating an SEO-friendly website, is seen as important.
Using the right keywords to target the right audience, consistently producing high-quality content, and having a diverse user experience would significantly increase the number of leads that come in. For new startups to grow, they must make this a priority, either using in-house or external resources to ensure an integrated, valuable website.
8. Capital is the greatest problem for about 33% of new entrepreneurs of small businesses.
Trying to make ends meet is not an easy task. And this is especially true for small businesses that are just starting out. That’s why one-third of entrepreneurs think they’re barely staying afloat.
Entrepreneurship statistics show that the biggest problem for 15% of these companies is marketing which helps to put the company on the map and get its name recognized. Additionally, 13% have a lot of time management issues. Nonetheless, only 10% of these companies use outsourcing services for their bookkeeping. 17% outsource their accounting jobs, and 15% outsource their payroll.
9. 32% of entrepreneurs claim the cost of health insurance is the biggest problem for the future growth and sustainability of their business.
It can be a difficult task for entrepreneurs to keep their business afloat and make sure the business grows and remains sustainable. In predicting the future of their businesses, a considerable number of entrepreneurs picked the cost of health insurance as the biggest factor that can affect the growth of their business. Entrepreneur statistics show that this is followed by economic uncertainty (32%), unavailability of qualified workers (26%) and regulatory burdens (24%). Interestingly, only 6% of companies believe foreign competition can affect the growth of their business.
Entrepreneurship and Diversity
10. Minority-owned businesses in the US increased by 38% between 2006 and 2007.
The number of small businesses owned by minorities is on the up. This is great news, and it encourages others to start their enterprises. Furthermore, entrepreneur statistics show that there is an increase of 34% in African-American owned businesses between 2007 and 2012.
The number of businesses owned by Hispanic people in the US also increased by a rate of 46% during this period. Again, there is plenty of space for these figures to expand, but seeing greater diversity among small business owners in the US is a step in the right direction.
11. In 2017, the number of women-owned businesses that are owned by minorities was 46%.
Their number accounts for around 5.5 million. These entrepreneur statistics 2017 also show such companies tend to employ over 2.1 million workers and generate revenues of about $361 billion. Of all the female-owned businesses, African-American women have about 19% of the total number, Latinas own about 17%, and Asian-American women account for about 9%.
The Future of Entrepreneurship
12. The number of female entrepreneurs rose by 114% in between 1997 and 2017.
Small businesses owned by women are showing prospects and, and their numbers are up. But progress still needs to be made before there is true gender equality seen in the sector. These statistics go on to show that in terms of values, females own more than 11.6 million companies in the US. They have almost 9 million employees and have generated up to $1.7 trillion as of 2017.
13. Each month, approximately 543,000 new businesses are launched.
These statistics show that there is an increased motivation to launch new businesses. More people are taking steps to establish their own companies and become entrepreneurs. Unfortunately, this doesn’t automatically translate to the successes of these businesses.
14. Entrepreneurs with small businesses make up 99.7% of all employers in the US.
Entrepreneurs play a large role in the US economy, as they represent the vast majority of total employers. By helping employees prepare for retirement, small businesses have a large role to play. Entrepreneurship US statistics show small businesses constitute about 99.7% of all employers in the USA. These companies also hire almost 50% of all the workers in the private sector (48.5%) and generate up to 63% of the country’s net new private-sector jobs.
15. 84% of entrepreneurs showed optimism for the growth of their businesses.
Trust in small businesses has also seen impressive gains because of an overall positive reaction from society to the establishment of small businesses. More than eight in ten small businesses expressed confidence in their business future, which is the highest it has been in over 10 years. This is a positive trend, as it encourages more people to start their own companies.
So, what percent of entrepreneurs are successful?
16. 20% of new companies do not succeed in their first year of business.
This shows how difficult it can be to make it in your chosen industry and why some people are reluctant to go and be entrepreneurs. These statistics also go on to show that only half of the new businesses exist up to year five in business.
Which brings us to:
What is the failure rate of all entrepreneurs?
17. 70% of companies in the USA fail after ten years.
There can be a lot of reasons why these businesses fail. These include no market for their product/service, running out of money to sustain the business, bad marketing, and not listening to the customers.
Another interesting question is:
What percentage of entrepreneurs went to college?
18. Only 17% of entrepreneurs went to college.
It may come as a surprise, but most entrepreneurs do not have a college degree. This shows a degree is not necessarily a requirement to begin a business of your own.
Nevertheless, most entrepreneurs/business owners either dropped out before being able to get a degree or just didn’t go to college. Just 26% of entrepreneurs said they had a bachelor’s degree, according to a survey conducted by CNBC / Survey Monkey. Another 17% attended college, and 20% graduated from high school but didn’t end up going to college. Also, 5% did not graduate from high school at all.
Even with the high failure rate for entrepreneurs, there is still a growing number of them.
The advantages of being an entrepreneur are more as enticing as ever. We hope these entrepreneur statistics have made you understand important information about entrepreneurs and can help you weigh the pros and cons of choosing to be one. Best of luck!