Did you know there are 33.7 million small businesses in the United States and 582 million entrepreneurs around the world?
And while no two business are exactly alike, entrepreneurs have lots in common as well.
Which generation can claim the largest amount of entrepreneurs among their ranks?
What do 63% of entrepreneurs say is more important than money?
What do over half of small business owners say is the #1 skill needed to be successful?
Check out these 79 must-know entrepreneur statistics for answers to these and more…
General Entrepreneur Statistics
Here are some statistics about the overall state of entrepreneurship today:
- 543,000 businesses are created in the U.S. each month. That’s 6.5 million new businesses each year.
- 97.6% of exported goods in the U.S. come from small businesses.
- The U.S. has a Global Entrepreneur Index of 83.6, the highest rating of all the countries measured. The GEI measures “the attitudes, resources and infrastructure” across 137 countries to see how supportive each country is of entrepreneurship.
- Business services and the food industries are the two most popular businesses for entrepreneurs. E-commerce and the health, beauty and fitness industry are close behind.
- 70% of small business owners offer their products and services online and that number is expected to increase. The events of the past year have changed consumer shopping habits. And businesses have seen how much they can accomplish remotely thanks to today’s technology.
- The most “early stage” activity comes from entrepreneurs in the age group of 45-54. Small business owners between 55-64 are right behind them. Those 20-34 are the least likely to be starting a new business.
- 84% of entrepreneurs choose to work in an area where they have experience. Other aspiring entrepreneurs want the opportunity to explore a new enterprise.
- One-third of American entrepreneurs launch their businesses with family members.
- California is the state with the largest number of small businesses. Wyoming has the fewest.
- GenX makes up 46% of small business owners. Boomers follow close behind at 41%. Millennials make up 13% and 1% of entrepreneurs are from GenZ.
- As mentioned earlier, there are 33.7 million small businesses in the U.S. And, worldwide, there are 582 million entrepreneurs.
Entrepreneurs and Diversity
While many of the barriers to starting a business have fallen, the statistics show we still have work to do to make entrepreneurship more inclusive. For example:
- 73% of small startups are owned by men.
- Roughly 70% of entrepreneurs in the U.S. are white.
- Women received only 2.3% of venture capital dollars in 2020. That’s down from 2.8% in 2019.
- Men are more likely to receive financing for a new business than women. Lenders also offer men more favorable loan terms compared to women.
- But women have a higher success rate with crowd-funding campaigns than men.
- There are 114% more female-owned businesses now than there were 20 years ago.
- 12.3 million businesses in the U.S. are women-owned and 47.8% of those businesses are owned by women of color.
- More than half of the new businesses started in the U.S. in the past decade are minority-owned businesses.
- In fact, 26.4% of Black Americans identify as entrepreneurs, the fastest-growing demographic of entrepreneurs in the U.S.
21. According to the Annual Business Survey, 18.3% of businesses in the U.S. are minority-owned.
Why Entrepreneurs Start Small Businesses
It’s not just about the money.
The desire for control and autonomy is a major factor when entrepreneurs choose to start their own businesses.
Whether it’s being able to select which projects they work on or the ability to work hours that suit their family life, entrepreneurs want the freedom to do things their way.
Case in point:
- Just 8% of entrepreneurs started their own business with money being the primary motivator. 63% say money is less important than the quality of life.
- Two-thirds of entrepreneurs started their business so they could be their own boss or build something from the ground up.
- 65% of entrepreneurs say they chose entrepreneurship to have the freedom to work when and where they want.
- The ability to work on projects of their choosing was a factor for 44% of small business owners.
- From 2019 to 2020, 27% more people started a business because of dissatisfaction with corporate America than in previous years.
What kind of education does it take to be a small business owner? Is a business degree necessary to be a successful entrepreneur?
While slightly more than half of entrepreneurs continued their education beyond high school, very few of them have business degrees. And education levels do not seem to affect profitability or success:
- Over 54% of entrepreneurs in the U.S. have a bachelor’s degree or higher.
- But only 9% of entrepreneurs have a bachelor’s degree in business.
- 20% of entrepreneurs have just a high school degree.
Entrepreneurs and Funding
How do entrepreneurs find funding for their new business?
While it’s easier than ever to start a business, it can’t be done for free.
Here are stats around the funding and cash flow of new businesses and startups:
- 40% of crowdfunding campaigns are raising capital for businesses and entrepreneurs.
- Investment funding decreased by 16% from 2019 to 2020.
- The average amount of start-up capital needed by a small business owner is $10,000.
- One-third of small businesses start with less than $5,000.
- 39% of business owners use cash to start their business.
- The second most common form of funding is from a 401k.
- 35% of small business owners use personal funds to handle financial setbacks in their business.
- 79% of small businesses have outstanding debt.
- 59% of entrepreneurs apply for a loan so they can expand their business, while 43% use a loan to cover operating expenses.
Entrepreneurs and Money
On average, it takes a business two to three years to become profitable. Here’s more information about entrepreneurs and their money:
- 67.7% of the world’s wealthiest individuals made their money as entrepreneurs and business owners.
- 78% of small businesses are profitable.
- 86.3% of small business owners have a salary of less than $100,000. 30% are not paying themselves at all. And 7% take home $150,000 or more.
- 27% of service-based entrepreneurs say they have undercharged a client because they felt it made their services seem more valuable.
- In 2019, the average small business owner had a take-home salary of $66,373.
- 78% of entrepreneurs say working for themselves has improved their money management skills.
- 54% of self-employed entrepreneurs say they make more money now than they did as employees in someone else’s business.
- 52% set aside the correct amount for taxes.
48. 65% maximize the tax deductions and write-offs available to them.
Entrepreneurs and Employees
How common is it for entrepreneurs to be solopreneurs? How many small businesses hire employees?
- 87% of early-stage entrepreneurs plan to create jobs for others.
- 54% of small businesses are hiring, but 89% of those businesses report they’re struggling to find qualified employees to hire for the open positions.
- 79% of small businesses have no employees.
52. 60.1% of small businesses with no employees are home-based businesses.
How Entrepreneurs Work
What does a typical day look like for an entrepreneur?
It’s a trick question… because, let’s get real. Our days can look totally different from one Monday to the next.
But here are some stats about how and where entrepreneurs get their work done.
- 26% of entrepreneurs look to the internet for advice when they have a question or problem.
- 45% of entrepreneurs report using their mobile devices to stay connected to and perform tasks for their business.
- 58% of entrepreneurs say they work odd or irregular hours.
- 81% of business owners say they work nights and 89% work on the weekends.
- 70% of small business owners work over 40 hours a week. 19% work more than 60 hours a week.
- 39% of entrepreneurs say they work fewer hours but are more productive.
- 54% of small business owners say communication is the number one skill necessary to be a successful business owner.
60. Problem-solving comes in close behind with 53% of entrepreneurs saying it’s the top skill required for success.
What sorts of problems do entrepreneurs face?
While entrepreneurship has many benefits, it’s not without its challenges. I’m sure that comes as no surprise!
Here’s what some entrepreneurs have to say about the trials of being a small business owner:
- 56% of entrepreneurs say finding quality employees is one of the greatest challenges in being a small business owner.
- Owners of small business startups say running their business is more stressful than raising children.
- 82% of small business owners say attracting new customers is harder than retaining current customers.
64. 74% of small businesses say healthcare costs are the top challenge for their business.
Entrepreneurship Failure Rates
Sadly, not all businesses make it.
So why do small businesses close? And what are the failure rates for entrepreneurs?
Let’s take a look at the numbers:
- The number one reason for business failure is the absence of consumer need, followed by a lack of cash flow.
- 20% of small businesses fail within the first year.
- Small businesses with the lowest success rates fall into the construction and transportation and warehousing industries.
- Despite what you may have heard about restaurants being the riskiest enterprise, food services have a success rate similar to other industries. 85% of restaurants will survive their first year.
- And there’s more good news. The small business failure rate has declined by 30% since 1977.
Uplifting Entrepreneurship Statistics
How do entrepreneurs feel about entrepreneurship?
While it may seem scary to step out and start a new business, entrepreneurs are typically resilient and hopeful.
And they have no regrets about choosing to work for themselves… (but we already knew that 🙂
Here are the numbers:
- 80% of small businesses make it to the second year of business.
- 92% of entrepreneurs don’t regret launching their businesses.
- 97% of self-employed professionals say they’d never go back to traditional employment.
- Entrepreneur rates have been going up in the US for the last 19 years.
- 63% of adults believe entrepreneurship is a promising career.
- 30% of entrepreneurs are serial entrepreneurs having started multiple businesses.
- The average number of businesses started by an entrepreneur is two.
- 59% of entrepreneurs work past 65 not because they need to but because they want to.
- 10% of entrepreneurs start a business because they aren’t ready to retire.
- More than one-third of women entrepreneurs say their mental health has improved since they started their own business.
Final Thoughts on Entrepreneur Statistics
Entrepreneurship is not for everyone.
And it’s not about laying on a beach somewhere drinking a Mai Tai.
These small business statistics show there are many financial risks and challenges to overcome.
But the rewards — the rewards of being a small business owner are amazing.
Entrepreneurship gives you the freedom and flexibility to build a lifestyle you want to live while doing the work you’re meant to do.
And as much as is possible, you are in control of your career and your life.
Tell me in the comments, what makes you most excited about owning your own business? (No statistics required 🙂