As you’ll soon learn from these entrepreneurship stats, more and more people are starting their own businesses with the hope that they’ll be able to work by their own rules, and at their own pace. What does it take to become a successful entrepreneur? You must be a fearless risk-taker that’s not afraid of rejection and criticism. Being your own boss can be a blessing in disguise if you don’t know how to manage your time and skills.
What more can you learn about entrepreneurship, and how did the world pandemic affect it?
Read on to find out!
Striking 2021 Entrepreneurship Stats and Facts
- There are over 31.7 million small businesses in the US.
- Small businesses have a much higher employee turnover rate than larger companies.
- $69,357 is the average annual salary for small business owners.
- 12% of business owners have only a high school diploma.
- 20% of small businesses fail during their first year.
- The best place to start a business in the US is Austin, Texas.
- 44% of business owners belong to Generation X.
- 40% of all businesses in the US are women-owned.
- The COVID-19 pandemic closed the door to a staggering 31% of small businesses.
- Online retailers have experienced a real renaissance during the pandemic.
Entrepreneurs Statistics and Facts — the Gist
1. 40% of people who start small businesses do so to be their own boss.
(FreshBooks)
Moreover, the main driving force behind many entrepreneurs when it comes to starting their own business is the freedom to manage their time — for some 65% of them. The freedom to designate the intensity of their work takes second place with 56%.
2. There are over 31.7 million small businesses operating in the US.
(SBA)
Small businesses make 99.9% of all business ventures in the US, and in line with entrepreneurship statistics from 2020, there are circa 31.7 million small businesses in the country at the moment.
2. In 2019, the total entrepreneurial activity (TEA) increased to a record-high 17.4%.
(Babson College)
31+ million Americans in the 18–64 age group started some form of TEA (early-stage entrepreneurial activity) in 2019 — the highest ever reported by the Global Entrepreneurship Monitor (GEM).
Moreover, global entrepreneur stats show that only three countries produce higher TEA rates than the US, which are Canada, Panama, and Chile.
3. Small businesses have a much higher employee turnover rate than larger companies.
(FreshBooks)
People working in small firms (those with fewer than 50 employees) are more prone to self-employment, as opposed to people working in larger corporations.
In fact, it’s estimated that around 35% of small-business employees quit their job within two years and start their own enterprise, whereas only 25% of people working in larger companies do the same.
4. $69,357 is the average annual salary of small business owners.
(Payscale)
Despite the highest annual salary being about $135,000 per year, the average entrepreneur income per year is “just” $69,357, while the low-salary bracket is said to be around $30,000.
Namely, there are a lot of things that affect the annual income, like experience, industry niche, and location.
5. 12% of business owners only have a high school diploma.
(Fundera)
12% of business owners can rely merely on their high school diploma, given that they never finished college. Likewise, just 2% of entrepreneurs have a doctorate.
Still, the vast majority of business owners, 53.78% to be precise, owns at least a bachelor’s degree. What is more, today there are a lot of perfectly good investment apps to learn a thing or two about the market fluctuations and investing.
6. Entrepreneurship statistics reveal that 24 million Americans want to abandon their 9 to 5 jobs and start their own business.
(FreshBooks)
The main reason for such a large number of aspiring entrepreneurs is the possibility to set your own schedule and manage your time as you see fit. Likewise, as much as 17% said that they were forced to do so because they were let go from their previous job.
7. How many entrepreneurs are there that work more than the average full-time employee? Over 70%.
(Fundera)
In the 19th century, people used to work almost 100 hours each week, with only one day off. In fact, it was none other than Henry Ford, the famous American business magnate, who first gave his workers two days off — five working days and eight-hour shifts (the 40-hour working principle) that we have today, which was enacted into law in 1940.
So, how many hours do entrepreneurs work? In a nutshell, about 70% of small business owners work for more than 40 hours per week, whereas 19% work over 60 hours per week.
8. 70% of small businesses sell their services and products through an online platform.
(NSBA)
Not only do 70% of small business owners sell their products online, but they also take care of their company’s website. Moreover, 34% of these business owners are in charge of all the updates and changes on the website.
9. How many entrepreneurs fail? 20% of small businesses fail during their first year.
(BLS)
Approximately 20% of small businesses close after only a year of working and around 50% fail within the first five years. The main reason behind these devastating statistics is losing money, having no experience, and poor marketing campaigns that stop their business from flourishing.
By the way, healthcare is the leading industry for small businesses, with 85% of businesses in this niche surviving their first year.
10. 30% of self-employed entrepreneurs have more than one business.
(FreshBooks)
A significant percentage of self-employed entrepreneurs have more than one job over the course of their career. In fact, most of them are “serial entrepreneurs,” maintaining 2–3 businesses throughout their professional life.
Latest US Entrepreneur Demographics
11. The best place to start a business in the US is Austin, Texas.
(Inc.)
Considering how Austin is one of the funkiest cities in the US, known for its fantastic food and vibrant city culture, it comes as no surprise that 0.51% of people living there are actually entrepreneurs.
This might not sound like much but, technically, every 200th person is most probably a business owner.
12. In 2019, the percentage of Latino small businesses went up to 34%.
(Stanford Graduate School of Business)
According to the latest Latino entrepreneurs statistics, from 2009 till 2019, the number of Latino business owners skyrocketed to 34%, surpassing the 1% growth rate over the recent years.
13. 9.1% of small businesses belong to US veterans.
(SBA)
In other words, US veterans own 2.52 million businesses in the US.
In addition, state statistics reveal that the highest number of veteran businesses is reported in California; 252,377 to be precise.
14. Youth entrepreneurship statistics show that 41% of business owners belong to millennials.
(Guidant Financial)
Still, it is Generation X that has overtaken the small business industry, with 44% of the small businesses belonging to them
In fact, almost 44% of business owners are between 39 and 54, followed by the baby boomers (those between 55–73 years of age) with 41%, Millennials (people between 23–38 years of age) with 12%, and a barely noticeable 2% of business owners that are 74+.
How Many Entrepreneurs in the World Are Women?
15. Female entrepreneurs own a whopping 12.3 million businesses in the US.
(Guinness World Records) (WBENC)
The first self-made female entrepreneur with a net worth of $1 million was Madame C.J. Walker (1867–1919). This talented woman from Louisiana started her career by selling care products for African-American women, and she soon became the wealthiest African-American entrepreneur in the US.
That said, today we have 12.3 million businesses in the US that are owned by women, according to entrepreneurs statistics from 2018. This is a giant leap forward since there were merely 402,000 female entrepreneurs in the ‘70s.
16. 40% of all businesses in the US are women-owned.
(UENI)
If we compare the statistics from about 50 years ago when only a small fraction of women, 4.6% to be accurate, were leading their own businesses, we’ll notice a significant change in numbers. Today, about 40% of businesses in the US are led by women entrepreneurs.
That said, the greatest surge occurred between 2014–2019 — by an incredible 21% no less!
17. African American women make 21% of all women-owned businesses.
(American Express)
Recent Black entrepreneurship statistics, conducted in 2019 by American Express, tell us that African American women own around 2,681,200 US businesses. What’s more, the highest growth rate — a whopping 50%–99% — was seen in the 2014–2019 time period.
18. 34% of women entrepreneurs believe that they’ll have the same access to capital as their male counterparts by 2033.
(Bank of America Business Advantage)
Even though men and women don’t have the same opportunities when it comes to capital, female entrepreneur statistics from 2019 state that 84% of women agree this will change one day. Nevertheless, as much as 34% of them think it won’t happen in the near future.
19. Gina Rinehart is the richest woman entrepreneur in the world and the 75th wealthiest person on the planet.
(Business Connect Magazine)
From the first “femmepreneurs” of the 1900s, the likes of Coco Chanel and Ma Perkins, to the female empowerment icon Madonna, we had many successful women entrepreneurs following in the footsteps of Rosie the Riveter.
Namely, Gina Rinehart is considered the number one female entrepreneur in the world with a net worth of $14.5 billion. On top of that, she is considered the 75th wealthiest person on the entire planet.
Entrepreneur Statistics and COVID-19
20. The COVID-19 pandemic has shut about 31% of all small businesses.
(SBM Report)
COVID-19 had an enormous impact on the US economy, and small businesses paid the highest price. The most recent statistics show us that 31% of small businesses had to shut their doors due to the current situation.
The numbers are even more alarming for the personal business sector (fitness centers, restaurants, hotels, bars, etc.). The most recent data on entrepreneurs from this sector highlights that 52% of owners had to close their businesses “until further notice.”
21. There was a 32% decrease in the number of full-time workers due to the pandemic.
(PNAS)
In the short period of only three months, between January and March 2020, many people lost their jobs due to the global pandemic. The number of full-time workers plummeted by 32%, whereas the number of part-time workers fell even more — by an alarming 57%!
22. 28% of entrepreneurs believe that the US economy will recover by the summer of 2021, entrepreneurship stats reveal.
(Business Wire)
Conversely, 34% of entrepreneurs claim it will happen post 2021.
23. By the end of 2020, 85% of independent restaurants might have shut down.
(Restaurant Business)
Small businesses are not the only victim of the global pandemic. Namely, independent restaurants got the short end of the stick as well. According to the Independent Restaurant Coalition, 85% of restaurants were estimated to close down by the end of 2020.
24. Online retailers have experienced a real renaissance during the pandemic.
(Forbes)
While a certain percentage of entrepreneurs in the world fight tooth and nail with the ongoing crisis, online retailers have experienced a real renaissance.
That is, giants like Amazon had a huge surge in stock price — by $1,000 no less!
Likewise, Zoom took the leading role when it comes to video call software as the most used tool for conducting online classes and conferences. Netflix, on the other hand, became the number one entertainment choice for over 16 million new subscribers.
FAQs
What percent of entrepreneurs are successful?
(BLS) (Oberlo) (MARKINGBLOG)
Judging by the fact that 78% of small businesses are profitable at the moment, we could say that equals the percentage of entrepreneurs that are successful in their business. This translates as three out of four businesses, which is quite encouraging.
Here are another interesting percentage and criteria. When discussing US billionaires, 62% of them are self-made. 18% of the billionaires made their fortune by combining inheritance and hard work.
What percentage of the population are entrepreneurs?
(MARKINGBLOG)
Out of 7.594 billion people on the planet, 582 million are entrepreneurs that either possess or have just started their own business. What’s more, the most successful entrepreneurs live in the US, UK, and India.
How many entrepreneurs are there in the US in 2020?
(Statista) (Crowdspring) (Inc.)
As determined by Statista, 0.31% of US citizens are entrepreneurs. To simplify, there are 310 entrepreneurs per 100,000 US citizens. Moreover, most American entrepreneurs live in Austin, TX, followed by Boulder, CO; Miami, FL; and Los Angeles, CA.
When it comes to women entrepreneurs, most of the startups are based in Seattle, Las Vegas, and Orlando, FL.
Why do most entrepreneurs fail?
(Business News Daily)
Despite there being a lot of reasons why a business fails, the most common ones include the lack of capital, lack of experience and expertise, lack of market demand, and bad management/marketing.
How can you stop that from happening? First, you need to focus on your goals and find qualified people that believe in your cause. Next, make sure you’re in sync with the latest industry news and trends. And lastly, never lose your motivation; don’t let failures stop you from growing.
Going through various entrepreneurship stats can also help, given that you’ll see the overall picture, and learn more in-depth about the most common mistakes entrepreneurs make.
Bottom Line
2020 was a challenging year for many small business owners and many had to adapt to the “new normal.” However, that didn’t stop enthusiasts from trying to salvage their business by becoming digital retailers.
Even though the fate of the world’s economy still hangs in the balance, we hope we managed to portray the concept of creating and maintaining a small business a bit better and show you exactly what it takes to be a successful entrepreneur.
Sources:
- American Express
- Babson College
- Bank of America Business Advantage
- BLS
- Business Connect Magazine
- Business News Daily
- Business Wire
- Crowdspring
- Forbes
- FreshBooks
- Fundera
- Guidant Financial
- Guinness World Records
- Inc.
- Inc.
- MARKINGBLOG
- NSBA
- Oberlo
- Payscale
- PNAS
- Restaurant Business
- SBA
- SBA
- SBM Report
- Stanford Graduate School of Business
- Statista
- UENI
- WBENC
