Home By the numbers 39 Entrepreneur Statistics You Need to Know in 2019

39 Entrepreneur Statistics You Need to Know in 2019

by Ivana Vojinovic

Small businesses and ambitious enterprises are at the heart of every industry. Not only do they immensely contribute to the overall revenue of a country, but they also have a beneficial effect on the workers themselves. 

Employees who decide to make the switch and become independent employers feel more fulfilled and motivated to work. There are a lot of inspirational entrepreneur statistics out there that show us the US is still the best place in the world to become your own boss and start something new.

Now, young entrepreneurs are mostly concerned about the risks that come with new businesses, including funding, staff, and success rate. Indeed, a large number of business owners rely on loans to keep the company operational and often have to use their personal funds to tie some loose ends. 

However, loans also help them expand their business and achieve more within their industries. Finding high-quality staff is no easy task, which is why many owners decide to go it alone, at least for a while. It is necessary to understand that the entrepreneurship failure rate has never been lower, with only 22.5% of businesses closing after a year.

With such a promising startup environment, it’s no wonder a lot of people are choosing this path over being a traditional employee. For many, entrepreneurship is a great career choice that allows for a better work/life balance and more income. 

Studies have also shown that this is not a young man’s game, despite what the public believes. Successful businesses are usually started by middle-aged men and women who have experience and want to apply it in their field.

To start things off, we’ve chosen some of the most interesting stats on the web. Take a look.

Fascinating Entrepreneurship Statistics:

  • 62% of US billionaires are self-made.
  • In 2016, there were 25 million Americans who were starting or already running their own business.
  • #1 reason why businesses fail is there’s no market need.
  • 60% of people who start small businesses are between the ages of 40 and 60.
  • There are 582 million entrepreneurs in the world.
  • 22.5% of small businesses fail within the first year.
  • Studies show middle-aged men start the most successful businesses.

Entrepreneurship Stats

 

1. 62% of US billionaires are self-made.

(Wealth-X)

According to data from a 2016 research done by Wealth-X, there are 585 billionaires in the US. Only 20% achieved this status through inheritance, while the huge majority are self-made. This is probably one of the biggest incentives for young entrepreneurs who are just starting up. The remaining 18% became billionaires through a combination of inheritance and hard work.

2. 15 million Americans are full-time self-employed.

(FreshBooks)

This number is according to the Fresh Books entrepreneurial statistics, which estimates that by 2020, America will have 27 million self-employed professionals. One in five workers plans to completely change her career once she gets into entrepreneurship.

3. 62% of adults believe entrepreneurship is a good career.

(Babson)

There seems to be a growing understanding of the benefits of entrepreneurship among people across the world. According to Global Entrepreneurship Model entrepreneurs statistics from 2018/2019, more than half of people feel starting one’s own business is a good career move. There may also be some misconceptions because an astonishing 40% of respondents think it’s easy to start a business, and 49% believe they have what it takes to do it.

4. There are 582 million entrepreneurs in the world.

(The Hill)

Although this is a significant rise compared to previous years, there is still quite a lot of room for improvement. Namely, entrepreneurship stats can help countries gain a better understanding of the market needs in certain areas and create a more fertile ground for this development. It is a great way to spot both the flaws and benefits of certain industries and act accordingly.

5. 26% of entrepreneurs say their biggest motivation for starting their own business was the idea of being their own boss.

(Guidant Financial)

What’s more, 23% wanted to pursue their passion and 19% just did it because the opportunity presented itself. For 12% of entrepreneurs, corporate America was the biggest problem, while 6% decided to start their own business after being laid off. According to entrepreneur data, another 6% did it because they weren’t ready to retire, and 3% were inspired by various life events.

6. 33% of entrepreneurs have only a high-school diploma.

(Guidant Financial)

It may seem surprising, but a third of all small business owners never got any further than high-school. This is an inspirational piece of information for the majority of young people who are worried they won’t accomplish anything without going to college. Altogether, 67% went to college, and 4% even managed to get a doctorate.

7. In Brazil, 53% of the entrepreneurs operate on their own.

(Babson)

Entrepreneur statistics from 2018 tell us more than half of business owners in the biggest country in South America don’t have any employees or intend to hire any. With this number, Brazil is the world leader, leaving Madagascar a distant second with just 30% of solo operators.

8. The highest number of self-employed professionals (19.6%) work in the construction/trades field.

(FreshBooks)

It appears that construction is the most popular profession for entrepreneurs, followed by retail with 10.9%, real estate with 10.7%, and consulting with 10.3%. The creative professions are in 7th place according to entrepreneurship growth statistics, while marketing is at the very bottom with 1.7%.

9. With a Global Entrepreneurship Index of 83.6, the US is the best country for entrepreneurs.

(GEDI)

The Global Entrepreneurship Index (GEI) is a numerical presentation of the climate a country creates for the development of small businesses. This index takes into account numerous factors to create one comprehensive overview of the situation. Switzerland takes an unexpected second place with 80.4, followed by three English-speaking countries – Canada, the UK, and Australia. Chad is bottom of the list with an index of just 9.

10. 59% of entrepreneurs who apply for a loan use it to expand their business.

(Federal Reserve Banks)

Entrepreneur demographics for 2018 show us 43% of owners use the funds to cover their operating expenses and 26% need them to refinance some other loans. It appears that loans play a huge part in the world of small businesses, as enterprises rely heavily on them both to keep afloat and make crucial steps towards the future.

11. 83.1% of US business owners started their companies.

(FactFinder)

In the true entrepreneurial spirit, 83.1% of owners built their companies from scratch. A significantly smaller percentage (11.3%) purchased their businesses, while 7.2% inherited them or received them as gifts.

12. Only 9% of entrepreneurs have a Bachelor’s Degree in business.

(TSheets)

According to entrepreneurship data, an even smaller percentage of owners (3%) went beyond that with either a Master’s Degree or a PhD in business. This is an important motivation for entrepreneurs who are only just starting out and worry about not having the proper education to pull it through. In fact, 32% of owners have only taken a couple of business classes, while most (46%) don’t have any form of business education.

13. 26% of entrepreneurs turn to the internet for business-related advice.

(TSheets)

Quite logically, the internet is still one of the biggest resources for a small business owner. It contains plenty of official data that users might find useful. What’s more, it gives them a chance to interact with each other and help each other out. In fact, entrepreneur statistics show 19% of business owners first turn to their colleagues for advice, while 14% go to books for answers. Only 11% of respondents said they first turn to their family.

14. Studies show middle-aged men start the most successful businesses.

(MIT Sloan)

There is a belief that young people are responsible for most successful businesses out there. However, studies have shown that middle-aged men have a much better chance of succeeding in their enterprises, especially if they’ve already worked in the field before. Statistics about entrepreneurs tell us business owners who start their companies and hire at least one employee are 42 years of age on average.

15. Business and food are the two most popular industries for entrepreneurships.

(GuidantFinancial)

This is based on Guidant Financial data that lists 5 of the most popular industries. Business and food are at the top with 11%, followed by health/beauty with 10%, general retail (7%), and home services (6%). In 2018, the health and beauty industry saw a significant 34% rise thanks to the various related global trends. Food and business categories also saw a rise of 14%, while automotive businesses dropped from the top five spots.

Stats on Small Businesses

 

16. #1 reason why businesses fail is there’s no market need.

(CBInsights)

According to the research done by CBInsights, 42% of businesses fail for this simple reason. The second most common reason that affects 29% of businesses is the lack of funds – in a word, bankruptcy. The third reason with 23% is the lack of chemistry and teamwork between employees.

17. 22.5% of small businesses fail in the first year.

(Office of Advocacy)

This is according to the new business statistics collected from 2004 to 2014. Calculations say only 79.9% of small businesses established in 2014 managed to get through to the next year. On average, about half of all companies survive more than 5 years, while only about a third reach the 10-year mark.

18. 60% of people who start small businesses are between the ages of 40 and 60.

(GuidantFinancial)

This is based on the 2019 small business study by Guidant Financial which surveyed more than 2,700 small entrepreneurships in the US. Interestingly enough, 4% of entrepreneurs were actually over 70 years of age. Clearly, it’s never too late to start your own business.

19. 62% of small businesses don’t have any staff.

(FreshBooks)

This stat makes sense considering a lot of entrepreneurs feel it’s quite difficult to find the right, high-quality staff for their companies. Because of that, many decide to simply go solo. The same report shows 28% of businesses have 1-5 employees, while only 10% have over 5 employees.

20. In 2015, small business employment made around 45% of total private employment in the US.

(Office of Advocacy)

There were over 124,000 jobs in the private sector, compared to nearly 60,000 according to statistics on small businesses. The biggest share in individual industries agriculture and forestry, fishing & hunting with 85.1%. The smallest share of small businesses was in the company and enterprise management with 12.2%. Besides that, there were also 24,155 small business jobs not classified in any specific industry.

21. Small companies were responsible for 97.6% of exported goods in the US in 2015.

(Office of Advocacy)

In total, 295,834 companies exported goods from the US in 2015. Out of that number, 97.6% were actually small businesses, which amounts to 287,835 firms overall. Despite the sheer number of entrepreneurs in the US, these small businesses only earned 32.9% of the country’s total export income – $1.3 trillion.

22. In a period of 21 years (from 1992 to 2013), small businesses accounted for 63.3% of new jobs in the US.

(Office of Advocacy)

It appears entrepreneurship is generally good for the economy of the whole country, as more than half of net new jobs came from these small businesses. In the aforementioned period, there were only two recessions, from 2001 to 2002 and 2007 to 2009, when the share was -47% and -61%, respectively.

23. Small businesses failure rate has declined by 30% since 1977.

(Entrepreneur)

These small business statistics are from Scott Shane, a professor at Case Western Reserve University. He argues this happened because business-owners are getting smarter, choosing profitable sectors and using reliable business-management technology. Apart from that, there is also a lower number of newly-created businesses and, therefore, less competition.

24. 67% of small business owners use personal funds to deal with various financial challenges.

(Federal Reserve Banks)

There are numerous financial challenges entrepreneurs face on a daily basis. The large majority decide to deal with them from their own pockets. Entrepreneurship statistics mention that 39% of owners prefer to take out an additional loan to deal with the crisis, while 33% take it out on the employees by cutting down the staff, hours, or downsizing their operations. Interestingly (or perhaps worryingly), 28% of owners simply choose to ignore their obligations.

25. 68% of small businesses have an outstanding debt.

(Federal Reserve Banks)

A majority of enterprises are in debt, with 55% owing less than $100,000. 37% of companies owe anywhere from $100k to $1 million, while 9% of companies owe over a million. This is according to an entrepreneur facts & statistics survey from 2017, although the outstanding debts seem to drag out from at least a year before.

26. Office of Advocacy statistics show 60.1% of small businesses without paid employees are home-based.

(Federal Reserve Banks)

Many famous companies started off in their homes, garages, and basements. Stats show this is still the most popular location for small businesses and startups waiting for their big break. Of course, the situation changes when there are employees who demand certain working conditions, which is why only 23.3% of small employer firms are actually home-based.

Entrepreneur Statistics: Benefits and Challenges

 

27. 32% of business owners use cash to start their entrepreneurship.

(GuidantFinancial)

The second most popular way of funding small businesses for 13% of entrepreneurs is through their 401(k) retirement plan. On the other hand, 12% ask their friends and family for financial help, and 24% rely on various loans and credits. Crowdfunding seems to be the least popular option, with only 1% of owners deciding on it.

28. 55% of Americans believe they are able to start their own business.

(Babson)

This figure from startup statistics for 2016 represents the national average, but the numbers are even higher in cities like Miami (60%) and Detroit (57%). Quite understandably, in these cities, there is also a lower number of entrepreneurs who are afraid of failing. Only 27% of entrepreneurs in Miami and 21% in Detroit have a fear of failing compared to the national average of 33%.

29. The biggest challenge for 33% of small business owners is the lack of capital.

(GuidantFinancial)

Obviously, trying to make ends meet is no easy task, especially for small companies that are just starting out. That is why it makes sense that, according to statistics on small business, nearly a third of entrepreneurs feel they are barely staying afloat. For 15% of businesses, the greatest challenge is marketing – getting the company on the map, while 13% have a lot of problems with time management. Despite that fact, only 10% of entrepreneurs use outsourcing to help them with accounting. 17% outsource accounting, and 15% outsource payroll.

30. For 43% of employees the biggest benefit of being self-employed is control over one’s career.

(FreshBooks)

In that same sense, 43% of surveyed employees found in statistics on entrepreneurs say career change is a great motivator for turning away from traditional employment. 33% of state the main reason why they would switch to self-employment is the financial incentive. While 32% of employees would start their own business for family reasons, 15% list health. They seem to believe being your own boss is less stressful or demanding and, therefore, better for your health.

31. 54% of self-employed entrepreneurs say they make more money now.

(FreshBooks)

This is something 67% of employees feel will happen once they’ve made the switch. 74% of employees feel they will also have to work harder when they become self-employed, but in reality only 59% entrepreneurs actually do so. The smallest difference in terms of expectations vs. reality of self-employment based on statistics about entrepreneurship is regarding work/life balance. 66% of people believe they will achieve it through entrepreneurship, and 68% of entrepreneurs confirm it.

32. 97% of self-employed professionals say they would never go back to traditional employment.

(FreshBooks)

If we look at these stats and compare them to previous ones, we can conclude that making the switch seems to be the biggest concern. Once it happens, a huge majority of employees feel satisfied with their choices. In addition to that, 70% of entrepreneurs work actively towards expanding their business, so there are certainly no regrets there.

33. For 27% of entrepreneurs, the hardest thing is to find talented staff or contractors.

(FreshBooks)

As you can imagine, making the switch from an employee to an employer comes with its own set of problems. US entrepreneurship statistics tell us that, besides finding quality workers, entrepreneurs also have problems with acquiring new customers (23%), finding money to reinvest (22%), setting the right prices (16%), and managing time effectively (15%). Interestingly, 17% of small business owners also mention one problem that people don’t normally think about – not having enough cash in hand because it all goes through their company.

Minority-Owned Businesses

 

34. The majority of entrepreneurs in the US (64%) are white.

(Babson)

14% are African-Americans, while 8% are Latino/Hispanic. Additionally, minority owned business statistics for 2018 show the rates are a lot more stable among whites and least stable among African-Americans. This piece of information could signify that the white ethnicity is still privileged.

35. 61% of baby-boomers say they would work through retirement by choice.

(FreshBooks)

45% of millennials would do the same, as would 47% of employees who belong to gen X. Although it would appear that baby-boomers seem to be more into working post-retirement, the truth is their opinion might be affected by the fact they’re either already retired or very nearly so. These startup statistics in 2018 numbers will undoubtedly change once gen X employees get closer to retirement.

36. For every 10 male entrepreneurs, there are 7 female entrepreneurs.

(Babson)

Around the world, there are 10 male entrepreneurs for every 7 female entrepreneurs. However, in six countries, this discrepancy has been all but ironed out, with women and men starting their own businesses at the same rate. These six countries are Indonesia, Thailand, Panama, Qatar, Madagascar, and Angola.

37. There are 8 million minority-owned businesses in the US.

(Office of Advocacy)

That being said, minority-owned businesses seem to hire fewer employees. In general, they have slightly over 8 employees, while non-minority owners hire more than 11 workers on average. The percentage of entrepreneurs in America shows us there’s a substantial difference between men and women entrepreneurs. Male owners hire more than 12 employees on average, while female entrepreneurs hire slightly over 8 people.

38. Data from 2017 tells us there are an estimated 11.9 million small businesses in the US owned by women.

(American Express)

These companies provide jobs for 9 million people and generate around $1.7 trillion in total. Over the course of 20 years, the number of female entrepreneurs has grown by 114%, which dramatically beats the total businesses growth rate of 44%. Furthermore, startup statistics show women-owned businesses make up 39% of all US companies.

39. Minorities accounted for 46% of women-owned businesses in the US in 2017.

(American Express)

There are around 5.5 million businesses owned by women who belong to minority groups. These enterprises employ more than 2.1 million people and generate $361 billion in revenue. African-American women make up 19% of the total women-owned businesses, Latinas own 17%, and Asian-American women own 9%.

FAQ

What percent of entrepreneurs are successful?

It depends on what you mean when you say successful. Entrepreneurship statistics show one third of all companies manage to get through their 10th year, which can be considered quite a success. The large majority of successful entrepreneurs are actually middle-aged men who have been in the industry for quite some time.

What is the failure rate of all entrepreneurs?

Only 22.5% of small businesses close during their first year. Around half of all companies survive for at least 5 years, while a third of companies last for 10 years. This might seem like a scary piece of information, but the fact remains that nearly 80% of entreprises survive through their first year.

What percent of entrepreneurs went to college?

According to entrepreneur statistics, 67% of entrepreneurs went to college but nearly a third didn’t. However, when it comes to the business-related education, only 9% have a Bachelor’s Degree, while 3% got a Master’s Degree or a PhD. Although it’s far from attending college, 32% of business owners said they’d taken at least a couple of business classes.

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